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The Road Out of Debt: Bankruptcy and Other Solutions to Your Financial Problems by Theodore W. Connolly, Joan N. Feeney

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Chapter 9. Sizing Up Your Mortgage Debt

A house is made of walls and beams; a home is built with love and dreams.

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Home ownership has long meant the fulfillment of the American dream, and over the last several years, more people than ever have realized that dream. At the same time, the lending standards of banks and mortgage companies loosened tremendously. It was easier than ever to get a mortgage with little or no money down. Millions of people overpaid for homes, believing the value would continue to rise and they'd get their money back. Many others tried to "play" the real estate market by buying a house and selling it for a quick profit. These factors brought about a gigantic housing bubble. That bubble, like any bubble floating in the air, burst. Now millions of people are having trouble making mortgage payments on homes whose values have plummeted.

Mortgage debt differs greatly from other debts because people have strong emotional ties to their homes. Moreover, when a person enters into a mortgage, the agreement is that the holder of a mortgage can foreclose, or take back, the house in the event of nonpayment. This can often happen in a matter of weeks without judicial process.

This chapter and the next chapter guide you along the road to handling mortgage debt and dealing with a potential foreclosure sale on your home. We suggest ways to reduce your mortgage payments and mortgage debts so you may stay in your home for as long as you choose. Most important, we discuss ...

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