Inquiring minds are reading the carnage left behind from gorging on too much debt.
How much was borrorwed during the housing boom?
During the great housing boom, homeowners nationwide borrowed a trillion dollars from banks, using the soaring value of their houses as security. Now the money has been spent and struggling borrowers are unable or unwilling to pay it back.
In this topsey-turvey world of today, a very strange occurrance is happening:
The result is one of the paradoxes of the recession: the more money you borrowed, the less likely you will have to pay up.
Lenders wrote off as uncollectible $11.1 billion in home equity loans and $19.9 billion in home equity lines of credit in 2009, more than they wrote off on primary mortgages, government data shows. So far this year, the trend is the same, with combined write-offs of $7.88 billion in the first quarter.
Yes, and just what does this mean when looking at the average person in debt hell?
“Anything over $15,000 to $20,000 is not collectible,” Mr. Terry said. “Americans seem to believe that anything they can get away with is O.K.”
But the borrowers argue that they are simply rebuilding their ravaged lives. Many also say that the banks were predatory, or at least indiscriminate, in making loans, and nevertheless were bailed out by the federal government. Finally, they point to their trump card: they say will declare bankruptcy if a settlement is not on favorable terms.
This nightmare is not even close to being over.
Filed under: Uncategorized |