The Three Ways Underwater Mortgages Hurt Florida’s Economy

Underwater Mortgages in FloridaThe St. Petersburg Times, on November 5, 2010, featured an article on the impact of underwater mortgages on the economy.

What’s underwater mean? If you owe on your mortgage than your house is worth, you are underwater. The St. Pete Times pointed out that in Tampa Bay this summer, “more than 45% of mortgage holders were underwater.”

There are three ways that underwater mortgages hurt the Florida economy:

1. If you are underwater, you can’t borrow against the equity in your home because you don’t have any equity! As a result, you can’t refinance your house because no bank will lend you more than what you house is worth.

2. If you have lost your job or your hours have been cut, you may not have the ability to pay for renovations when you need repairs. Additionally, fewer houses are being built because Floridians can’t afford to move.

3. This all cascades because contractors, roofers and plumbers have to lay off workers. Building supply companies see a decline in their revenue because no one is buying construction materials or home improvement materials.

To make matters worse, spending by cash racked homeowners declined. You can’t very well go out to dinner or even take a trip if you can’t afford the renovations or repairs on your house.

If you are a good person in difficult circumstances and are having difficulty making your mortgage payment. Bankruptcy may be an option for you. Give us a call today to discuss your options.

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