Upside down? Underwater? Drowning?

This week I’ve been inundated (it’s tax season so when I say inundated, I mean all seven lines ringing off the hook) with clients distraught they are completely underwater in their homes, that no matter how much they tighten their belts, they simply cannot pay their mortgage anymore.

Know you are not alone. People who would never dream of walking away from their house are packing their bags.

Making it even harder to make this heart-breaking decision is the implication from numerous, national articles discussing the fact that walking away from a toxic mortgage is somehow immoral.

Wait a minute. The banks are reaming millions of Americans while making record profits and one of my clients who lost his job and can’t pay his exorbitant, interest-inflated mortgage is somehow the villain in this scenario?

And just when we need some actual action from the Feds, they want out of the rocky mortgage business because it’s so rough and tumble.

Just think about it for a minute. If the banks were forced to lower everyone’s interest rate down to 3% or even 3.5%?

How would that change my client’s life let alone the American economy as a whole?

First off, the vast majority of mortgages jeopardized would be brought current. Not only would it resolve the looming 2.4 million foreclosure disaster, it would help people that haven’t defaulted yet.

Those people barely keeping their heads above water to make their payments would have more discretionary income to buy things. And isn’t that exactly what all the economists keep saying will jump start the economy?

We need to buy more. We as Americans need to invest again. But how can we as a society when every penny goes to the bank in 7% interest payments?

It seems the government stepped in and dictated (well, at least to a certain degree) to the credit card companies what is fair and accepted interest rates.

Why aren’t they demanding the same of the home loan industry?

If you lose your credit card, there are of course consequences.

But if you lose your house? Families are destroyed.

Wouldn’t an overhaul of the ARM interest rates be a win/win for everyone? The homeowner, the local businesses, the stock market.

Well, for everyone but the banks.

But you know what? We bailed them out once.

I think it is about time for them to return the favor!