Skip to comments.Walking away from a mortgage might make sense
Posted on 09/26/2010 7:41:50 AM PDT by Oldeconomybuyer
Millions of middle-income home- owners are struggling to pay down bloated, underwater mortgages while wealthier Americans are simply mailing in the keys to the mansion and calling it a day.
It's time for average Americans to start seeing their mortgage papers for what they are: records of financial transactions, not moral documents.
In a free-market society, an individual homeowner is not responsible for the strength of the nation's housing market. If anything, walkers may stimulate the economy, by spending a portion of the money they were sending to the banks each month.
Take a look at your finances and decide for yourself whether homeownership makes sense. A better decision for the future of your family may be to rent, pay off your credit cards, and put the savings in a college fund for your children or grandchildren.
Walk away from your house if it will be better for you to rent. And remember, walking away now doesn't mean that homeownership may not work for you later.
(Excerpt) Read more at mercurynews.com ...
Who’s going to rent to them? Their credit will be destroyed.
Gee, everybody wins when people walk from their mortgage, and it stimulates the economy too...yeahhhhhhhhh/s
That tells you all you need to know.
How will walking away from your morgage affect your credit score and ability to buy a home in the future?
Someone will rent to them but it probably won’t be a very nice place.
Lindsay, the Ph.D. candidate, should know that the federal government taxes “forgiven” debts as income.
All those refi's to the lower rates didn't hurt either. The other bozos used the rates to bump up their living standard, but....some of us used it to ensure that we could stay where we were.
Choices, choices....they all have consequences.
On Friday, the Feds reported that 95% of all new mortgages have been issued by Fannie and Freddie Mac, the govt system with NO regulatory control. Private banks issued just 5% of all new mortgages.
What this author (a Ph.D. candidate at Stanford) suggests would more than damage the private banks and further strengthen the govt financial entities.
Further, I cannot ever remember an author recommending purposeful default.
Ok, you walk away from a $1,500 mortgage payment so you can rent a $1,500 a month apartment?
As a landlord, I learned long ago to look at the *reason* for personal bankruptcy on an individual basis, divorce for example is a common reason why bankrupt but otherwise potentially excellent tenants are looking to rent.
Unfortunately, defaulting on a badly underwater loan often makes good financial sense, and if a applicant is currently employed and current on other obligations, it may even be a plus as other property managers may not be taking a closer look, and rejecting potentially desirable tenants out of hand.
If she is advising a deed in lieu she is being irresponsible not to also mention this will have as negative effect on your credit as a forclosure
A good friend told me she’s ‘giving’ her house back to the bank next year. I wonder what that could mean????
I agree. Some circumstances occur that are beyond a person’s control.
Zero Hedge is predicting QE2 on a vast scale which will cause a large wave of refis.
Dumbing responsibility & accountability downward. We are led by a lawless/corrupt man & he begets a lawless congress. We will become a lawless nation - joining the lawless/corrup world.
A depressed area like Detroit is a good example of a place where walking away from an underwater mortgage in order to move out-of-state and look for work is a far more rational choice than burning through your savings to keep the house while hoping that the local economy will turn around.