Are we in the great depression? Or will home prices rebound soon?

The straight scoop is this - no one really knows.  It is clear that the "recession" we are in is the deepest "recession" since the great depression.  However, it is still not clear whether we will not experience any growth in our economy for 10 years which is an oversimplification of what happened in the great D.

Bottom line, the Great Depression had some odd characteristics that are important to remember:  The economy "freshened" and improved and then would decline.  It went up and down for a decade.  The most troubling issue of all is that most scholars believe that only the armament build up prior to World War II got us out of the Great D.  Not any of the fancy programs that were designed provide stimulus.

Why is this important?

If you are severely "underwater" on your home, it may be as long as 6 years before prices even register a real increase much less get you back to "even".  If you are long-term unemployed - which affect construction workers disproportionately, you may need to switch industries.  An example of this is Marshall Field's  LaSalle Bank Building which was the last building built in the Chicago Loop in 1934 with no major construction until the late 1950's.

Another haunting comparison is the  Auburn Automobile Company which produced Auburns, Cords and Duesenburg's.  The company survived the crash of 1929 and made through the 1937 car year when it simply had no more cash to be run.  Even with incredible innovations such as front wheel drive, it would be until 1940 that any new money entered the economy and would have kept a company like this going with armament orders, etc.

What about my home - bottom line if your home is reasonably priced in terms of your tax, loan service and other expenses compared to rent, then it is a good value and certainly better than renting.  However, if your home loan service and loan balance are simply far beyond the comparable cost of renting, then it unfortunately becomes a smart choice to surrender the home and rent superior rental properties at reduced rates.

Why won't lenders just adjust my balance down to a "reasonable" level so that I can survive in my home - it seems like the best choice for everyone - wrong!   Banks rely on the absolute firmness and collectibility of their loan and mortgage obligations.  If a precedent was set that these loan balances could be adjusted simply because they were unreasonable due to changes in the economy, then how would a bank ever predict what risk factors and other costs they would have to build into their loans.

It is my prediction that prior to 2014, nearly 25% of all homes purchased or refinanced between 1997 and 2007 will be sold at foreclosure and that this necessary transfer of wealth will end up adjusting these over leveraged properties while protecting the legal sanctity of a contract.  Is this a good result?  From a practical standpoint - no.  However, if our system of laws break down, we will not be able to structure and control the commerce of our country.

Lastly, I believe that instead we should give judges in a Chapter 13 bankruptcy some limited ability to adjust loan balances where justified and provide a 25 year recapture period where 50% of the appreciation is recaptured back to the lender.  This allows the borrower to keep their home, this allows the bank to "give up" an existing noncollectable balance while keeping a house occupied and sharing in 50% of the potential appreciation.

We've got a long ways to go in this current slowdown, we don't need anymore dams and it will be difficult to get congress to allocate money for a much needed high speed rail network.  Therefore, it's time to look for reasonable unglamorous solutions to our economic situation.

I filed bankruptcy, but the condominium association is pestering me for past due assessment amounts. What do I do - should I pay them, hide or not worry about this.

The answer is - if you are moving out, the assessment bill dies as it regards you at the time the unit is either sold at foreclosure or simply sold.   Another way the assessment is recovered is when the unit is leased by the condominium association.  Here's the kicker - when you file bankruptcy, you surrender your interest in the unit, but it isn't actually transferred to someone else, instead, your lender would eventually foreclose on the unit or take it back via a deed in lieu of foreclosure.  Not to complicate this answer, but essentially, today because of the desire to clear title of multiple mortgages, it generally takes a foreclosure sale to transfer the property to a new owner.  However, if you move out after the bankruptcy, the condominium association still has to evict you to get clearance to lease out the unit to pay association fees.  The best thing you can do is to release your interest to the condominium association so that your unit is not empty, the association stays out of default and eventually you are released from the liability of ownership in the sheriff's sale.  Bottom line - an occupied unit is always best for everyone.  Therefore, if you are staying - pay your assessments until you are told by the lender to leave.  If you are leaving, help the association by releasing your interest so they can rent your unit.

I can't sell my condominium because the condominium association is in bad shape. Several units are paying assessments and the association is broke. What should I do?

The answer is - do something!  Under the circumstances, the best thing to do is become a member of the board to help keep things moving.  At the next board meeting, suggest that the board retain/hire a law firm that specializes in eviction.  Then as your condominium budget  allows, hire the firm to evict the longest non-payers of assessments.  The law allows the association to rent the unit for up to 13 months on a single lease to recover assessments.  If the past due assessments are recovered prior to the end of the 13 month lease, the surplus is paid to the owner of the condominium unit and is allowed to move back-in.  If the assessments are not paid up, then another 13 month lease can ensure.  Pretty soon, your building will be full of paying renters, your association budget will be repaired and hopefully you can sell your unit and not at a loss!

How Long Can I stay in My home after I stop Paying the mortgage

494 days

According an article in the Chicago Tribune, May 22, 2011. This figure was pulled from RealtyTrac who tracks foreclosures from the filing to the sheriff's sale. Bottom line - you can stay in your house at least a year.

The problem - what if a deficiency judgment is entered against you. Then you've gotten rid of your house, but still need a bankruptcy to get rid of the deficiency judgment.

Falling home prices have caused many people to choose to default on their home. It is good idea to see a qualified bankruptcy attorney to see if you are "judgment proof" or will the target of a deficiency judgment.