One third of homeowners in Tucson with mortgages, about 68,173 residential properties, now owe more than their properties are worth, according to a third quarter report released Tuesday from First American CoreLogic, a real estate tracking firm.
1. Comment by K B. (Alexis1)— November 24,2009 @ 11:07AM
2. Comment by Roy O. (royv)— November 24,2009 @ 11:11AM
Ratings:-27+32
Just had to have that brand new house, eh? Couldn't wait until the real estate bubble burst, eh? Or were they all just taken in by some smooth talking real estate agent who convinced them that prices were just going to go up and never come down again??? Who ultimately pays? We all do.
3. Comment by Noah D. (ironschiek)— November 24,2009 @ 11:20AM
Ratings:-7+38
What?! All I've heard from the agents and mortgage brokers is that right now is the time to buy. Oh wait that is what they told the people who were underwater too hmmmm.
5. Comment by Miles T. (Miles Tugo)— November 24,2009 @ 11:40AM
Ratings:-9+23
I told you, Mary P, that this bubble would burst and you and your Realtor buddies would all be in deep spit. Didn't believe me, did you? Well, it took a couple years longer than I thought, but it happened and WOW did it happen. Maybe I'm not the dumba$$ you pegged me for.
6. Comment by K W. (kkjw)— November 24,2009 @ 11:44AM
Ratings:-1+37
We bought our house in 2007 with a 20% down payment and affordable monthly payments. We knew the value was going to go down but not this much! However, we're sticking it out and staying put, so hopefully we'll get our home value back to where it was when we bought it in 5-10 years.
7. Comment by Bryan W. (bryanwelch)— November 24,2009 @ 11:46AM
Ratings:-3+6
[This comment has been removed]
8. Comment by Joseph C. (Arafel)— November 24,2009 @ 11:57AM
Ratings:-3+31
Ah, the joy of buying an easy fixer upper on the west-side for $60,000 in 1998 and paying the whole thing off (plus fixes) in 2008.
Free and clear in my early forties.
A 50-some year old neighbor couple got a $140,000 mortgage on the house the hubby inherited from his mother.
They started out pretty much debt free to start but now they are underwater on a house that they pretty much got for free.
Hope they enjoyed the new cars and "toys" because they will be paying for them through their mortgage until their dead.
9. Comment by Scott K. (skooter72)— November 24,2009 @ 11:59AM
Ratings:-3+33
Everyone in my neighborhood who bailed on their house got 100% financing, so they had no incentive to keep paying when the value took a dive. I'd say the lenders dug their own hole by making this type of loan, but that's just me...
12. Comment by Ben M. (suzukimethod)— November 24,2009 @ 12:09PM
Ratings:-0+23
underwater? check.
Greatly underwater? No.
We made a sensible offer on the cheapest house we could find (that was decent) when we moved to Tus in 2005.
Tally up what we'd have spent in rent over those 4 years, and we're still in the black. walking away now would eliminate all that, and hopefully by when we sell in a few years, the market will be stable and on the mend, and we'll at least break even (before you even consider rent costs and tax savings).
now if you've banked on the house, taken out huge equity lines of credit, and are underwater by a great deal? i can see why you might walk away, but that doesn't make it right...
And who let that happen? where was the financial regulation? oh yeah..
http://bit.ly/8zXxZu
that plus consumer greed - treating homes as investments rather than a place to live....bad bad mix.
14. Comment by b p. (IsThisforReal)— November 24,2009 @ 12:17PM
Ratings:-1+21
11 has the truth. Nobody "owns" their home unless it is paid off. They are simply "tenants", renting from a big bank, Fannie Mae or some such. The American Dream is debt, pure and simple. I bought in 2007, am underwater, and won't "own" my home until 2037 - I'll be long dead by then.
15. Comment by Jay B. (jamunk)— November 24,2009 @ 12:18PM
Ratings:-0+29
Anyone wanna buy my house...LOL As a first time home owner, I knew the value would probably drop, but that does not keep me from making my payments. When the market took a dump, I was able to refinance for a lower rate and keep my payments within my budget. People just need to realize when you get into a house there will be good years and bad as far as the value goes. But if your like me you purchased a home, not an investment. If you buy to make a profit, you might as well take your chances in Vegas, the odds are probably about the same.
16. Comment by mark s. (gypsymark)— November 24,2009 @ 12:19PM
Ratings:-4+30
Buy now. Really, it is cheaper to buy than rent. Who cares if the "value" goes down a bit more. I bought a year ago and am paying $250 less in mortgage than I would for the equivilant in rent. And, it's MY HOME.
I don't want to "flip", I just want to close my gate at night, sit out among the stars in the Arizona desert with my dog by my side.
Really, there's no better time than now to buy.
17. Comment by Bill B. (4485)— November 24,2009 @ 12:19PM
Ratings:-3+10
... so if I read this, you walk away from what you owe, come back and bid to win later and get your same house back at a gonga deal price, simply for bailing out on the payments.. some risk involved, don't do this at home you may loose your house understood.. Interesting. very interesting.
18. Comment by Bill B. (4485)— November 24,2009 @ 12:21PM
Ratings:-4+11
I owe I owe, so off to bankrupcy I go.. cus its a cute time to do this now.. and will save me ten's of thousands of dollars and years of payments to simply bail? Amazing
20. Comment by Jim C. (1651)— November 24,2009 @ 12:26PM
Ratings:-8+13
I'm not underwater. If I were by a whole lot (say $50,000), I'd walk. See, I don't figure myself to be a chump. This whole decline in home prices doesn't need to be balanced on the back of my personal wealth.
Banks have got to share in the pain. They have the ability to modify these mortgages. The stats show they're not doing it. They need to be encouraged.
22. Comment by A. R. (archcc)— November 24,2009 @ 12:31PM
Ratings:-0+24
Not a surprise. The economic model for Arizona is growth, which is not sustainable. When growth stops the economy tanks....too many jobs are lost. The domino effect starts with real estate as foreclosures and homes for sale increase dramatically, driving down prices.
Arizona needs a more broadly based and stable economic model.
24. Comment by Bobo A. (4323)— November 24,2009 @ 12:38PM
Ratings:-0+23
They may be underwater, unless you can rent for a whole lot less than you can own, nothing is lost until one goes to sell. And of course, walking negates any chance of appreciation down the road.
25. Comment by Bobo A. (4323)— November 24,2009 @ 12:41PM
Ratings:-1+14
There have been several proposals for banks to eat the losses by decreasing the loan amount to market value. If that happens, does tha bank also get to keep any appreciation after that point, or at least up to the amount they had to eat?
26. Comment by Jose C. (Jose C.)— November 24,2009 @ 12:53PM
Ratings:-0+27
I own my house thank you! I bought a reasonable house, well within my means 18 years ago, and I'm happy to say it's been paid off for the last 3 years.
American Dream? Dreamers dream big! Apparently I live in a small sparsely inhabited place called Reality!
Credit can be a wonderful thing, unless you F it up!
27. Comment by jonah m. (Jonah)— November 24,2009 @ 1:04PM
Ratings:-7+7
Here is the deal people are doing in Las Vegas--I read about it in Time Magazine..
1--If you are underwater on your home, buy a similar house NOW for a lesser price reflecting the current market. (of course, this assumes you will qualify)
2--move into the new house
3--stop making payments on the old house and let the bank take it back.
28. Comment by Mike W. (MikeW67)— November 24,2009 @ 1:04PM
Ratings:-11+5
The economy will bounce back. Government spending created many jobs in the Great Depression, Hoover Dam for example. Some paint that as socialism, others as a wise public investment -- saw a cool site; Balkingpoints ; incredible satellite view of earth
29. Comment by James F. (UofASouthpaw)— November 24,2009 @ 1:12PM
Ratings:-0+14
Please explain why being absurdly upside down is reason to walk away? As Bobo said, it's not a loss unless you sell lower than you bought. The housing market is just like the stock market, your 401K or IRA's... you will still make money if you just ride it out, and don't cash in until you're up. I'm $40K-$50K under. So I won't be in a position to sell anytime soon - big deal. If you don't want to grow old in that house then save up as much cash as you can for a down payment on what you really want, and then rent out the one you don't want to live in. Values WILL head back up in time, so as long as you keep making payments and hold on to it eventually you'll be back in the black.
30. Comment by Kelly K. (SedonaSun)— November 24,2009 @ 1:14PM
Ratings:-0+21
‘Why are we doing this?’
Um. Because you signed a contract, that's why.
But I get it. Had prices stayed stable or gone up, you'd be happy. But because they dropped, you have the right to walk away from financial obligations. The payment is still the same, right? It just looks worse because, what, now you're "stuck" in the house you bought because you loved it?
There are no guarantees, including real estate. When I was an agent, I used to tell people to buy what they can on one income in case something happens (this was before the bubble rose and burst, btw) because all it takes is an OTJ injury or illness to cut your income drastically. Been there, lived that.
Think anyone took my advice? Nope. People want to have the best they can afford at the expense of savings, safety net, etc. Greed will always bite your rear end eventually.
Granted, job losses now may well be keeping people from being able to make those payments, and that's really sad. But remember these wise words from I don't know who...
31. Comment by EUGENE C. (Eugene)— November 24,2009 @ 1:56PM
Ratings:-0+17
If you buy your house to make it your home, what does it matter how much the present "market" value is ? Unless you are marketing it it does not maatter.
Don't be so money oriented !
you can tell who sees their house as a home and who sees it as an investment.
32. Comment by Jim H. (JWH)— November 24,2009 @ 1:58PM
Ratings:-1+16
Guess that means the other two thirds of us bought homes at a reasonable price and didn't buy the ARM and interest only loans but took out regular locked in low interest 15-30 year mortgages. What a concept.
33. Comment by Marcia B. (mdelanty)— November 24,2009 @ 2:38PM
Ratings:-7+6
Signing a contract doesn't mean you are morally obligated to pay your mortgage. The contract plus other law defines both what your obligations are if you want to keep the house (e.g. keep making timely payments) and what happens if you don't make those payments (late penalties, foreclosure, etc.). Corporations default on contracts all the time if the cost of default is less than the cost of maintaining an unfavorable contract, they default. If you are 20%+ underwater and having trouble making payments, it may be cheaper to walk than to keep paying (that is, damage to credit is less costly than making payments on a loan that greatly exceeds the value of the house). It is not true that you only realize the loss when/if you sell - if you are paying monthly payments significantly higher than you could rent or buy the house at current market value, you are losing every month.
37. Comment by James F. (UofASouthpaw)— November 24,2009 @ 3:24PM
Ratings:-0+6
Caleb, you can't assume potential savings when calculating gains/losses. If you buy a widget for $500 and later sell it for $1000 then you MADE $500, even if sometime during your ownership it was worth only $100. Sure, if you'd waited maybe you had the POTENTIAL to make $900 instead of only $500, but that doesn't mean you lost $400. In the same sense, even if your mortgage is costing you more than it would if you'd waited to buy, you still aren't losing anything as long as what you get out of it is more than what you put into it. That might mean you have to ride it for 20, 30, 40 years. A gain that takes a long time to mature is still a gain.
38. Comment by Emmett G. (EAG)— November 24,2009 @ 3:29PM
Ratings:-1+9
I say, "Walk away from your home." We the taxpayer helped bail out the banking industry. Thus far, 124 banks have been taken over by our government. Our government then should eat the cost of investments gone bad. What I don't understand is we tell homeowners to make their house payments or their credit will go to hell and we won't lend them any money becasue they are a bad credit risk. However, the banking industry does the same thing by investing in mortgages, toxic assets, etc. and we bail them out. As far as I'm concerned, half the bankers, Wall Street clowns and all our Senators' and Congressmen/Congresswomen should be in jail; period. Our government is a joke and the world now is starting to say it.
39. Comment by Harry R. (Hairyism)— November 24,2009 @ 3:37PM
Ratings:-1+4
Owned our house for 25 years. Used only half of the equity to start a business. Lost $200k in value, now I'm upside down. Fortunately we got a fixed 6.25% but it still sucks to owe more than it's worth.
40. Comment by tom g. (tom10012)— November 24,2009 @ 3:54PM
Ratings:-4+3
People who are underwater on their mortgage should read Prof. White’s article, Underwater and Not Walking Away, http://ssrn.com/abstract=1494467. As he argues, don’t let the government or the banks shame or scare you into holding onto a bad investment. And don’t believe the wishful thinking that if you just hold on, prices will rebound soon. It's not going to happen for a long while in Tucson. In the meantime, you are throwing away your money, unless your mortgage payment is less than what you can rent for. Read Prof. White’s article, do some research, and make the best financial decision for you and your family.
41. Comment by Jim H. (JWH)— November 24,2009 @ 4:02PM
Ratings:-0+8
People just 'walking away' just really frosts me. It's all the rage on home LOANS and credit card DEBT .It's a matter of personal responsibility.
You bought the house, you bought the goods and ran up your DEBT. Then oh I'll just...walk away leaving "evil" banks and everybody else holding the bag.
I like where the report staes most of these are from 2005 peaking in 2006. Wow and the value of your property hasn't gone up already. I get that it sucks that it has depreciated but guaranteed in 5 - 10 years your house WILL be worth more than it is now, IF you keep it up, etc. Again, some presonal responsibity involved.
42. Comment by James F. (UofASouthpaw)— November 24,2009 @ 4:03PM
Ratings:-0+4
If you are going to compare your mortgage to comparable rent and consider walking away, don't forget to factor in the tax savings of owning. If, after tax savings, your mortgage vs. rent is more or less a wash, you may as well just hang on. If you are on a fixed mortgage then over the years your payment will not change, while rent rates will go up. And, prices may not rebound SOON, but they will eventually. Then you'll have equity whereas with renting you get nothing back.
45. Comment by Richard S. (Ricardo Small)— November 24,2009 @ 7:14PM
Ratings:-1+5
Many commentors assign blame to the underwater homeowners with some glee. Certainly some of the upside down owners were looking to profiteer during the time of skyrocketing prices. However, most of these people were not given accurate professional advice. The pros of the real estate industry ... lenders, appraisers and real estate agents ... conspired to close deals, no matter how bad those transactions were for people. The pros are the culprits. The pros need to be held accountable. However, enforcement authorities only make token efforts to prosecute the pros. Courts should require restitution from the pros for the losses people suffered due to the frauds many of the pros imposed on homeowners.
47. Comment by Michael S. (mgschmid1)— November 24,2009 @ 9:42PM
Ratings:-2+2
Whatever happened to personal responsibility? Oh it was the Realtor, Oh my neighbor got rich flipping their house. It was all greed. Deal with it, remember the 2000+ excuse for failure is someone else. How pathetic.
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Report: One third of Tucson homeowners underwater on mortgage
One third of homeowners in Tucson with mortgages, about 68,173 residential properties, now owe more than their properties are worth, according to a third quarter report released Tuesday from First American CoreLogic, a real estate tracking firm.DA
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Just had to have that brand new house, eh? Couldn't wait until the real estate bubble burst, eh? Or were they all just taken in by some smooth talking real estate agent who convinced them that prices were just going to go up and never come down again??? Who ultimately pays? We all do.
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What?! All I've heard from the agents and mortgage brokers is that right now is the time to buy. Oh wait that is what they told the people who were underwater too hmmmm.
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I WISH I was underwater! Instead I made a 250K downpayment. So all of the loss was mine.
Live and learn.
next time--minimum down payment. Put the rest in the bank.
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I told you, Mary P, that this bubble would burst and you and your Realtor buddies would all be in deep spit. Didn't believe me, did you? Well, it took a couple years longer than I thought, but it happened and WOW did it happen. Maybe I'm not the dumba$$ you pegged me for.
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We bought our house in 2007 with a 20% down payment and affordable monthly payments. We knew the value was going to go down but not this much! However, we're sticking it out and staying put, so hopefully we'll get our home value back to where it was when we bought it in 5-10 years.
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[This comment has been removed]
Ah, the joy of buying an easy fixer upper on the west-side for $60,000 in 1998 and paying the whole thing off (plus fixes) in 2008.
Free and clear in my early forties.
A 50-some year old neighbor couple got a $140,000 mortgage on the house the hubby inherited from his mother.
They started out pretty much debt free to start but now they are underwater on a house that they pretty much got for free.
Hope they enjoyed the new cars and "toys" because they will be paying for them through their mortgage until their dead.
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Everyone in my neighborhood who bailed on their house got 100% financing, so they had no incentive to keep paying when the value took a dive. I'd say the lenders dug their own hole by making this type of loan, but that's just me...
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Is it just me, or does this sound like yet another story that is practically begging owners to walk away and use the economy as an excuse?
Am I underwater? Yes. Am I about to foreclose or file bankruptcy? NO! Am I making my payments so I can live in a house I love? YES!
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No one really owns their home. It's merely occupied by someone who'll pay the taxes on the property. The American dream is just that.
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underwater? check.
Greatly underwater? No.
We made a sensible offer on the cheapest house we could find (that was decent) when we moved to Tus in 2005.
Tally up what we'd have spent in rent over those 4 years, and we're still in the black. walking away now would eliminate all that, and hopefully by when we sell in a few years, the market will be stable and on the mend, and we'll at least break even (before you even consider rent costs and tax savings).
now if you've banked on the house, taken out huge equity lines of credit, and are underwater by a great deal? i can see why you might walk away, but that doesn't make it right...
And who let that happen? where was the financial regulation? oh yeah..
http://bit.ly/8zXxZu
that plus consumer greed - treating homes as investments rather than a place to live....bad bad mix.
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Imagine what would happen if everyone who's underwater walked away. You think the economy's bad now?
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11 has the truth. Nobody "owns" their home unless it is paid off. They are simply "tenants", renting from a big bank, Fannie Mae or some such. The American Dream is debt, pure and simple. I bought in 2007, am underwater, and won't "own" my home until 2037 - I'll be long dead by then.
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Anyone wanna buy my house...LOL As a first time home owner, I knew the value would probably drop, but that does not keep me from making my payments. When the market took a dump, I was able to refinance for a lower rate and keep my payments within my budget. People just need to realize when you get into a house there will be good years and bad as far as the value goes. But if your like me you purchased a home, not an investment. If you buy to make a profit, you might as well take your chances in Vegas, the odds are probably about the same.
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Buy now. Really, it is cheaper to buy than rent. Who cares if the "value" goes down a bit more. I bought a year ago and am paying $250 less in mortgage than I would for the equivilant in rent. And, it's MY HOME.
I don't want to "flip", I just want to close my gate at night, sit out among the stars in the Arizona desert with my dog by my side.
Really, there's no better time than now to buy.
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... so if I read this, you walk away from what you owe, come back and bid to win later and get your same house back at a gonga deal price, simply for bailing out on the payments.. some risk involved, don't do this at home you may loose your house understood.. Interesting. very interesting.
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I owe I owe, so off to bankrupcy I go.. cus its a cute time to do this now.. and will save me ten's of thousands of dollars and years of payments to simply bail? Amazing
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RE #16 is right. Current rent for apartment is on the RISE. It is cheaper to live in a small house then to rent IF you qualify.
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I'm not underwater. If I were by a whole lot (say $50,000), I'd walk. See, I don't figure myself to be a chump. This whole decline in home prices doesn't need to be balanced on the back of my personal wealth.
Banks have got to share in the pain. They have the ability to modify these mortgages. The stats show they're not doing it. They need to be encouraged.
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#14, I wish this were true. Even if your home is "paid off", you are allowed to live there only if you keep paying the property taxes.
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Not a surprise. The economic model for Arizona is growth, which is not sustainable. When growth stops the economy tanks....too many jobs are lost. The domino effect starts with real estate as foreclosures and homes for sale increase dramatically, driving down prices.
Arizona needs a more broadly based and stable economic model.
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Gee, we havent had that much rain, dont build in a flood plain...
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They may be underwater, unless you can rent for a whole lot less than you can own, nothing is lost until one goes to sell. And of course, walking negates any chance of appreciation down the road.
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There have been several proposals for banks to eat the losses by decreasing the loan amount to market value. If that happens, does tha bank also get to keep any appreciation after that point, or at least up to the amount they had to eat?
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I own my house thank you! I bought a reasonable house, well within my means 18 years ago, and I'm happy to say it's been paid off for the last 3 years.
American Dream? Dreamers dream big! Apparently I live in a small sparsely inhabited place called Reality!
Credit can be a wonderful thing, unless you F it up!
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Here is the deal people are doing in Las Vegas--I read about it in Time Magazine..
1--If you are underwater on your home, buy a similar house NOW for a lesser price reflecting the current market. (of course, this assumes you will qualify)
2--move into the new house
3--stop making payments on the old house and let the bank take it back.
It works every time.
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The economy will bounce back. Government spending created many jobs in the Great Depression, Hoover Dam for example. Some paint that as socialism, others as a wise public investment -- saw a cool site; Balkingpoints ; incredible satellite view of earth
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Please explain why being absurdly upside down is reason to walk away? As Bobo said, it's not a loss unless you sell lower than you bought. The housing market is just like the stock market, your 401K or IRA's... you will still make money if you just ride it out, and don't cash in until you're up. I'm $40K-$50K under. So I won't be in a position to sell anytime soon - big deal. If you don't want to grow old in that house then save up as much cash as you can for a down payment on what you really want, and then rent out the one you don't want to live in. Values WILL head back up in time, so as long as you keep making payments and hold on to it eventually you'll be back in the black.
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‘Why are we doing this?’
Um. Because you signed a contract, that's why.
But I get it. Had prices stayed stable or gone up, you'd be happy. But because they dropped, you have the right to walk away from financial obligations. The payment is still the same, right? It just looks worse because, what, now you're "stuck" in the house you bought because you loved it?
There are no guarantees, including real estate. When I was an agent, I used to tell people to buy what they can on one income in case something happens (this was before the bubble rose and burst, btw) because all it takes is an OTJ injury or illness to cut your income drastically. Been there, lived that.
Think anyone took my advice? Nope. People want to have the best they can afford at the expense of savings, safety net, etc. Greed will always bite your rear end eventually.
Granted, job losses now may well be keeping people from being able to make those payments, and that's really sad. But remember these wise words from I don't know who...
"Just because you can, doesn't mean you should."
Frugal isn't a 4-letter word.
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If you buy your house to make it your home, what does it matter how much the present "market" value is ? Unless you are marketing it it does not maatter.
Don't be so money oriented !
you can tell who sees their house as a home and who sees it as an investment.
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Guess that means the other two thirds of us bought homes at a reasonable price and didn't buy the ARM and interest only loans but took out regular locked in low interest 15-30 year mortgages. What a concept.
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Signing a contract doesn't mean you are morally obligated to pay your mortgage. The contract plus other law defines both what your obligations are if you want to keep the house (e.g. keep making timely payments) and what happens if you don't make those payments (late penalties, foreclosure, etc.). Corporations default on contracts all the time if the cost of default is less than the cost of maintaining an unfavorable contract, they default. If you are 20%+ underwater and having trouble making payments, it may be cheaper to walk than to keep paying (that is, damage to credit is less costly than making payments on a loan that greatly exceeds the value of the house). It is not true that you only realize the loss when/if you sell - if you are paying monthly payments significantly higher than you could rent or buy the house at current market value, you are losing every month.
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WHOOPS - #33 should be in my name - was accidentally logged in in wife's name. My thoughts/opinions only, not hers.
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I was up $100K at one point, now I'd be happy if someone took the keys from me - that's how bad I want out of this stinkhole of a city.
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I thought it was called "upside down". When did it become "underwater"?
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Caleb, you can't assume potential savings when calculating gains/losses. If you buy a widget for $500 and later sell it for $1000 then you MADE $500, even if sometime during your ownership it was worth only $100. Sure, if you'd waited maybe you had the POTENTIAL to make $900 instead of only $500, but that doesn't mean you lost $400. In the same sense, even if your mortgage is costing you more than it would if you'd waited to buy, you still aren't losing anything as long as what you get out of it is more than what you put into it. That might mean you have to ride it for 20, 30, 40 years. A gain that takes a long time to mature is still a gain.
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I say, "Walk away from your home." We the taxpayer helped bail out the banking industry. Thus far, 124 banks have been taken over by our government. Our government then should eat the cost of investments gone bad. What I don't understand is we tell homeowners to make their house payments or their credit will go to hell and we won't lend them any money becasue they are a bad credit risk. However, the banking industry does the same thing by investing in mortgages, toxic assets, etc. and we bail them out. As far as I'm concerned, half the bankers, Wall Street clowns and all our Senators' and Congressmen/Congresswomen should be in jail; period. Our government is a joke and the world now is starting to say it.
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Owned our house for 25 years. Used only half of the equity to start a business. Lost $200k in value, now I'm upside down. Fortunately we got a fixed 6.25% but it still sucks to owe more than it's worth.
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People who are underwater on their mortgage should read Prof. White’s article, Underwater and Not Walking Away, http://ssrn.com/abstract=1494467. As he argues, don’t let the government or the banks shame or scare you into holding onto a bad investment. And don’t believe the wishful thinking that if you just hold on, prices will rebound soon. It's not going to happen for a long while in Tucson. In the meantime, you are throwing away your money, unless your mortgage payment is less than what you can rent for. Read Prof. White’s article, do some research, and make the best financial decision for you and your family.
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People just 'walking away' just really frosts me. It's all the rage on home LOANS and credit card DEBT .It's a matter of personal responsibility.
You bought the house, you bought the goods and ran up your DEBT. Then oh I'll just...walk away leaving "evil" banks and everybody else holding the bag.
I like where the report staes most of these are from 2005 peaking in 2006. Wow and the value of your property hasn't gone up already. I get that it sucks that it has depreciated but guaranteed in 5 - 10 years your house WILL be worth more than it is now, IF you keep it up, etc. Again, some presonal responsibity involved.
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If you are going to compare your mortgage to comparable rent and consider walking away, don't forget to factor in the tax savings of owning. If, after tax savings, your mortgage vs. rent is more or less a wash, you may as well just hang on. If you are on a fixed mortgage then over the years your payment will not change, while rent rates will go up. And, prices may not rebound SOON, but they will eventually. Then you'll have equity whereas with renting you get nothing back.
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They need a government bailout and fast…..
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We have not noticed any foreclosures in our neighborhood. I don't doubt that some people are underwater.
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Many commentors assign blame to the underwater homeowners with some glee. Certainly some of the upside down owners were looking to profiteer during the time of skyrocketing prices. However, most of these people were not given accurate professional advice. The pros of the real estate industry ... lenders, appraisers and real estate agents ... conspired to close deals, no matter how bad those transactions were for people. The pros are the culprits. The pros need to be held accountable. However, enforcement authorities only make token efforts to prosecute the pros. Courts should require restitution from the pros for the losses people suffered due to the frauds many of the pros imposed on homeowners.
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And the tax credits and incentives keep on comin' ! Prolong the inevitable!
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Whatever happened to personal responsibility? Oh it was the Realtor, Oh my neighbor got rich flipping their house. It was all greed. Deal with it, remember the 2000+ excuse for failure is someone else. How pathetic.
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Nationwide it's 1 in 4. Here it's 1 in 3.
Good to know we're ahead of the curve...not!
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How many of these underwater homeowners did multiple cash out refinances, during the boom years? Probably a bunch of them.
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