We still are have not hit the bottom of the market yet.

We still are have not hit the bottom of the market yet.
This is from an article that was in the Chicago Tribune Real Estate section over the weekend. It is a very sad story and I know of many young couples who are facing this same problem. I am very concerned to see that the banks and still so greedy over working with people to get a problem solved. This could also be a sign that our banks are losing profits and are not able to correct the problem. We still have not reached the bottom of this mess yet.

1. Del Phillips buys a 1-bedroom $212,500 condo in a Lakeview courtyard building in May 2007.
2. He takes out two loans: first mortgage of $159,375 and a second of $53,125- both from Chase.
3. In January 2009, he lost his public affairs job.
4. In April 2009,  he applied for a modification under the federal HAMP program.
5. He continued paying the $1400 a month mortgage while he waited to hear on the modification.
6. In September 2009, he was turned down because his hardship was “not of a permanent nature.”
7. He tried to short sell the condo.
8. But Chase told him that they had the right to persue him for the second mortgage (not to mention the fact that, under the law as I’ve heard it described, the second loan would be considered “income” by the IRS if it was forgiven by the bank so he would have to pay taxes on it.)

Phillips sought help from Neighborhood Housing Services of Chicago Inc., a federal government-approved counseling agency, which broached the idea of filing personal bankruptcy.
“(Phillips) did everything right. He had good credit, and then he lost his job,” said Michael van Zalingen, director of homeownership services for Neighborhood Housing Services. “If your lender isn’t interested in helping you, or the only thing you qualify for hurts your household, I don’t think you have any moral obligation to stay bound in that mortgage or paying to that company when it no longer makes economic sense for you.”
Phillips bristled at the bankruptcy suggestion, but after consulting with an attorney, in late February he filed for Chapter 7 bankruptcy, not the Chapter 13 that would have negotiated his debts, including those with Chase.
“My other option was to say I’ll roll the dice with the bank,” Phillips said. “Will they really come after me? I wouldn’t put it past the bank industry to do that. It’s going to kill me to pay a bank for a house I no longer owned. I was, like, there’s no way I’m going to pay the bank another dime.”
Lawyers say they are hearing about more instances of mortgage lenders selling the delinquent second loans used to buy homes during the industry’s heyday to third parties that are then pursuing debtors.
“He’s not outside the norm,” said Stephen Cleary, a Chicago attorney and board member of the Northwest Side Housing Center. “He can now sleep at night. The mental anguish has been relieved.”