This Congresswoman from Florida is advising her constituents to not leave their homes when they are foreclosed on. Both the Congresswoman and the talking head on CNN were giving inaccurate advice.
The talking head said it can take up to a year after a foreclosure before an eviction happens. She also said that often the banks are unable to produce the proper documents required by the courts in order to evict somebody, essentially allowing you to keep your home and not pay the mortgage.
Actually.. the time between foreclosure and the constable showing up at the house to put all their possessions on the curb is fairly quick. The process of the actual foreclosure is what can take a while.. meaning.. people have plenty of time to settle their debt to the mortgage company, and avoid the foreclosure.
The issue is.. people who sign a mortgage are borrowing a large sum of money, and when they cannot pay the loan back, they are supposed to keep the house? Why? Why should anybody keep anything that they've bought on borrowed money when they stop paying the money back?
CNN had an example squatter.. She bought a $145,000 house with $40,000 down. That's absolutely reasonable to me, great job. However, her payment was $800 a month, and after 4 years, it adjusted to $1500, and she couldn't pay it and stopped paying it... and then got foreclosed on.
Say what? She put a lot of money down, which creates opportunities to refinance into a regular fixed rate loan. She probably had 6 months knowing what was coming to sell the house. And if she had 40 grand in the first place, how is it she couldn't make a $1500 a month mortgage payment while working on a way to get a reasonable mortgage?
Some people seem to think it is not the responsibility of the home"owner" to know what the terms of their mortgage is. And.... why wouldn't they need to know that? Don't you think that's a rather important thing to know when signing your name on a loan document for very large sums of money?
Because the home"owner" was too stupid to get a regular fixed rate mortgage, they're supposed to just squat in the house when the bank takes it back? Better yet, the rest of us are supposed to "bail" them out?
No no no.. you DON'T bail out stupid.
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