Need to Reduce Debts While Avoiding Mortgage Foreclosure (California)

Many distressed homeowners are hoping to avoid mortgage foreclosure California and to reduce debts.  This is becoming extremely critical as we witness the effects of our nation’s largest stimulus spending begin to wear off.  The stimulus helped prop-up the stock market for a while, but it is slipping again; except now we are also witnessing the most rapid increases in our national debt.  The federal government should focus on reducing debt levels because too much debt is destabilizing for our economy, and will likely delay any meaningful recovery. 

US Must Reduce Debts

Our national debt already exceeds $13 billion, which is roughly equal to the US’s annual gross domestic product (GDP) and roughly double the debt ratios during the Reagan administration.  Because the stimulus requires the issuance of more debt and the printing of more money, creating and financing additional stimulus is problematic.  At the current rate of growth, our debt will soon surpass the US debt-ratios in 1945, after WW II ended.  

Mortgage Foreclosures California Appear To Be Unavoidable

This has important implications for homeowners who are having difficulties making their monthly mortgage payments.  As the stimulus wears off and banks are forced to wrestle with the growing backlog of unpaid mortgages, there will be much more mortgage foreclosures (California) and the falling prices will encourage more strategic mortgage defaults.

Strategic Mortgage Default

This is a scenario that banks are hoping to avoid, and that the federal government should realize that it cannot prevent.  As the economy worsens, more and more families may feel compelled to choose strategic mortgage default to avoid depleting their savings.  It is a simple question – would we rather save what’s left of our family’s finances or the bank’s?  

As strategic mortgage default gains more popularity, I am seeing marketing campaigns from lenders and the federal government attempting to characterize it as immoral.  To the contrary, strategic mortgage default is both moral and appropriate for many families. 

Are More Mortgage Foreclosures (California)  Inevitable?

It is estimated that more than 25% of all real estate is worth less than the mortgage balance.  If distressed homeowners find themselves in a losing battle to save their homes, strategic mortgage default is the wisest of decisions because it is much better to conserve some funds for other family necessities.  However, it does not have to mean that more foreclosures will result.

With the proper help, strategic mortgage default can be implemented in a way to avoid mortgage foreclosure (California).  For example, short sales are a viable strategy if capable assistance is used to ensure a successful outcome.