Time Magazine ran a cover story (Sept. 6) entitled “The Case Against Homeownership,” and it was food for thought. The upshot of the article is that everyone is not really suited to be a homeowner. One major problem right now: a lot of people’s homes are “underwater,” that is they owe more on their mortgage than the house is worth. Since they can’t sell the house, they can’t move to where the jobs are, which is what a lot of Americans do in a tight job market.

Some other important points about homeownership:

#1- Renting can be cheaper, because you are only paying for one thing, shelter. Homeowners are paying for interest, property taxes, insurance, homeowner association dues, maintenance, etc. etc.

#2- Homeownership may not be such a good investment anymore. There have been record foreclosures lately in many parts of the country. Owning a home has historically been a good investment, but it may not be now or for a long time to come.

#3- Do you really get a tax benefit from owning your home? For every dollar you spend on mortgage interest and real estate taxes, you can deduct only about 28 cents from your income taxes.According to Time, the average homeowner only saves $542 a year by having the deduction. And more than 1/3 of home-owners don’t even itemize their deductions, so they don’t get a tax benefit from homeownership anyway.

So is owning a home (or staying in your home) right for you? It can come down to other factors. Many people want to own a home so that their children can go to better schools. And many people like to come home to a green leafy suburb as opposed to an apartment house.

But if homeownership has become an expensive hassle for you, it may be time to bail. Sell the house, or if you are underwater and in a bankruptcy case or considering filing a bankruptcy case, let the house go back to the lender. In most cases, any balance due on the mortgage after a foreclosure will be discharged or cancelled, and you won’t have to pay it.

If you are currently in a Chapter 13 case and decide to let your house go, contact the office about filing a Motion to Modify Plan to surrender the house. Or, if the home was the only reason you were in Chapter 13, you may be able to convert your case to Chapter 7 bankruptcy, discharge your debts and be out of bankruptcy and debt-free in a matter of a few months. ■


I find my greatest pleasure, and so my reward, in the work that precedes what the world calls success.

— Thomas Edison, inventor

Only a man who knows what it is like to be defeated can reach down to the bottom of his soul and come up with the extra ounce of power it takes to win when the match is even.

— Muhammad Ali, boxer

All the adversity I’ve had in my life, all my troubles and obstacles, have strengthened me… You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you.

— Walt Disney, movie producer

SAVE $$$$$

“Reverse” Mortgages

If you’re 62 or older and looking for money to finance a home improvement, pay off your current mortgage, supplement your retirement income, or pay for healthcare expenses, you may want to consider a reverse mortgage. It’s a product that allows you to convert part of the equity in your home into cash without having to sell your home or take on additional monthly bills.

In a “regular” mortgage, you make monthly payments to the lender. In a “reverse” mortgage, you receive money from the lender and generally don’t have to pay it back for as long as you live in your home. Instead, the loan is repaid when you die, sell your home, or when your home is no longer your principal residence. The proceeds of a reverse mortgage generally are tax-free, and many reverse mortgages have no income restrictions.

I have had a couple of cases where my elderly clients were facing foreclosure, and could not raise the money to catch up. By taking out a reverse mortgage, the loans were paid off. The clients could stay in their houses for life, without making payments (they have to pay the taxes and insurance on the property).

But reverse mortgages are not for everyone. The closing costs are steep (you are paying for a government guarantee), and if you plan on leaving the house to someone after you are gone, a reverse mortgage may not be for you.

If the idea of a reverse mortgage appeals to you, educate yourself thoroughly about it, and seek out a reputable broker to help you arrange it. For more information, go to www.hud.gov and type “reverse mortgage” into the search box. ■


Making light of a lousy economy

The economy is so bad that . . .

• I got a pre-declined for a credit card.

• I ordered a burger at a fast-food joint and the kid behind the counter asked, “Can you afford fries with that?”

• CEOs are now playing miniature golf.

• My ATM gave me an IOU.

• A picture is now worth only 200 words.

• I bought a toaster oven, and my free gift with purchase was a bank.

• The economy is so bad, Angelina Jolie adopted a child from America.

• The economy is so bad that African television stations are showing ‘Sponsor an American Child’ commercials!

• It’s so bad, Snoop Dogg had to start eating regular brownies. ■


Are bill collectors threatening to take your home or garnish your wages? Are they threatening to do anything else that they are not allowed to by law?

Is your mortgage company charging you fees and costs that are not due? Are you just overwhelmed with debt?

Facing a foreclosure or repossession? Is the I.R.S. threatening to levy your wages or other property? If any of these situations describes you, contact Mr. Black at 713-772-8037 or make an appointment to go see him. ■

ARE YOU IN CHAPTER 13 NOW? Always keep the law office updated with your current address, telephone numbers, and email address. We may need to reach you quickly.

You can check on the status of your Trustee payments, how much you still owe on your case, etc., by going to www.13datacenter.com to set up your user ID and password. Lose job or overtime? Expenses increase? Want to give up property to lower payments? Go to www.jthomasblack.com , click on “ Current Clients Click Here” on home page, and fill out the Motion to Modify worksheet. Fax to office at 713-772-5058. We’ll review it and contact you if a change to your plan is possible.

J Thomas Black
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Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization