Forbes has an article today about the "Bush Administration's plan to rescue the housing market" -- well I'm a landlord who owns three multi-family houses, all of which have adjustable rate mortgages and all of which have seen interest rate hikes of double what I was originally paying. If my profit margin was $300 per-month when I originally bought the properties, all of that has been washed away with mortgage payments increasing by $700 per month, per property!
It also won't help the 16% of subprime borrowers who are already delinquent or in default, and it won't help millions of other homeowners who either will be deemed able to pay the higher rates when they adjust, starting in January, or who have the unhappy circumstance of having a house worth less than their mortgage or a loan that has already reset to the higher rates.
Well let's see... I'm already delinquent and in default on all of my properties, check. I'm one of those in the "unhappy circumstance of having a house worth less than their mortgage", check. My mortgages have already reset to higher interest rates, check. Great, I don't qualify.
The big problem with the sub-prime situation doesn't only apply to the single-family owners who bought a bigger house than they could afford -- it also applies to all the landlords who purchased or refinanced multi-family properties and who provide housing for the more than 34 million renters in the USA. Speaking of the rental market, it is projected that the number of renter households will increase by more than 1.8 million between 2005-2015 . I'm sure that number doesn't even take into account all the people who lost their homes (and their good credit) and now need a place to live.
I've given up trying to afford my properties. I'm ready to walk away. There is no help in sight and stressing about trying to pay for them isn't worth my health. I already know its financially impossible for me to afford them (rental income is $7,000 per month, new mortgage payments are $10,000 per month), so why fight the inevitable? I have all three of my properties listed for sale with a broker, at prices totaling $195,000 less than what I owe the banks. The real estate market is bad because everyone is waiting for the prices to keep falling. Even if my properties do sell, I'm going to end up owing the banks over $200k -- which I also cannot afford.