A very good friend in the mortgage business told me that a LOT of banks are freezing peoples home equity lines and lines of credit due to the nationwide foreclosure rate and real estate market, and the fact Maryland has been placed in a "declining market".
An example of what a travesty this is would be a couple that uses that line to pay for their kids education, after they worked to pay down their primary mortgage. No funds any longer. The same with retired people, they have a small mortgage (can't qualify to get another) yet have lived responsibly, and now have that "line" for emergencies and to live from, but they have found it's no longer honored.
These decisions are based on what's called a "declining market", which I am told all of Maryland is in. This is one of the standards the lenders look at.
Now, if a lender has not already done this, some people have "cashed out their line", or equity in full, for fear this is going to happen, and put it in an under funded savings account, which now puts the lender in more of a profitable position, and putting the person in a real debt, with payments that otherwise would not have happened. All of this is just compounding the position of once a strong country, now in DEBT more than ever, and growing.
IF this is happening as much as I am told, I sure hope the average person knows it's a possibility, because not everyone over financed, over spent, but considered these line of credits good planning, to now have the rug pulled from under them could be a real hardship. Just another step to sending the current economy into the worst free fall for the last 75 years.
DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
13 comments:
SHOCKING....BUT NOT REALLY. THIS WAR HAS LEFT US IN QUITE A PICKLE. WHOEVER MOVES IN THE BIG WHITE HOUSE AFTER BUSH IS IN FOR QUITE A MESS TO CLEAN UP. I BELIEVE IT WILL GET EVEN WORSE BEFORE IT GETS BETTER.
OMG, I called my lender, and this is true, I want to cry. I sure wish this was put up sooner.
Being Politicaly Incorrect, I had a question come to mind. How does the Government justify raising our property taxes but our home values are declining? I blame this mess on all Politians not just the President. This is a result of our Government over spending for needless projects. Would it not be nice and common sense for the voters to hold all Politians responsible, (Federal, State and Local), for this mess. I keep forgetting Everybody wants handouts in a Socialistic Government.
Why does everyone blame all his or her troubles on the government?
Blame the reckless consumer for putting himself or herself in a position to be upside down in a mortgage, and therefore being foreclosed on.
Blame the reckless lenders for loaning to unqualified people.
This recession is consumer made.
They will have to lower the assessed value soon, but thats when the taxes will go up. Now, don't you guys have a tax cap in Salisbury, what about the County. Taxes have brought in more money, now taxes go down, what will happen to the service. Dam shame the governement didn't put some away during the good years, now pay the price people.
2:38, Your exactly correct, now what?
The banks ae just as responsible for this mess, and they are going to make it worse. I heard this was coming. Try to get a second loan right now, it won't happen.
This is the tip of the iceburg. Things are going to get much wose before they get better. Start with our own mayor and council spending, then the State of Md., then the Feds, they are all the same. Beg, then borrow, then steal from the people that work the most.
Folks: The real estate bubble peaked here on the Eastern Shore in November of 2005.
This area is one that was totally hyperinflated with values increasing over 400% in just a few years.
Does anyone remember the reason people liked the Eastern Shore?
Nice weather, laid back lifestyle and low real estate prices.
I knew there was trouble when little ranchers in a beanfield outside Berlin (Decatur Farms) that backs up to the projects were selling for over $420,000.00...
A few years earlier the same basic home would have been $80,000.00 to $125,000.00.
Those same homes are now selling at foreclosure auctions in the low to mid $200,000.00's IF anyone other than the lender is bidding.
GREED IS WHAT DRIVE THE MARKET
If you did not steal your phantom equity from the bank by advancing it in a HELOC then its too late, they are getting smart.
It blows my mind that a lady in Ocean Pines can STEAL $200,000.00 from the bank by pumping out equity and the only thing that happens to her is a few points on her credit score.
Someone walks into a bank with a gun and steals $8,000.00 cash from the teller, they get 15 to 20-years.
Its time for people to stop sucking on the crack pipe of phantom equity
Bosshogg is right again.
What is the most powerful force in the universe?
Love?
Compound interest?
No. DENIAL is the most powerful force in the universe.
How much of price inflation was caused by REALTORS who said your property is worth another $100,000 so that they could get a bigger commission payment. How much did they pay the realestate appraiser? Isn't this all about money.
Is this a sign of recession? OR is it a sign of another DEPRESSION like 1929. Read it. It is wide. wide.
Oh yes the price of gasoline and utilites had nothing to do with the economic downturn. Then we have the U.S. Dollar that has devalued 14% on the world market. The foreclosures are just the cherry on top and the worst is yet to come.
Right now our economy is doing just what Al-Quida wanted to do, break the nation economically, and it is directed at us from many directions. Just what we need is another Trillion Dollar War.
You all just go ahead and spend your money to stimulate and economy that is DOA.
Bosshog, your so right, and very accurate with your examples. All of west Ocean City and Berlin went through this inflation, and now the banks are the ones doing the damage control. Where is the bottom going to be, 50% of today's asking price, or where it was in Nov. 2005? In any case, all the poor saps that paid twice as much will now work a lifetime to build equity, and those that bailed out, cleaned up. A home was never intended to be a piggy bank to be robbed whenever it was full, but a lifetime savings account to be broken once, at retirement.
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