You Walk Away!


Arizona home

I was watching 60 Minutes the other night and watched the story about how many people are walking away from their homes and mortgages because it is no longer of economic benefit to keep their mortgage going.

The home owners who were interviewed were able to keep up their mortgage payments, but because their house had devalued so much it was not economically viable to continue to be invested in their home.

Their home had become a “Worth – Less” investment.
They had been astute enough to do the figures and realise that to continue would be financial suicide. Walking away from your home would not be an easy thing to do, some can’t do it, because of the attachment. Their decision was hard, but calculated.

An example of a young couple who bought their first home and decided to turn their back on it. They bought the house at the price of $262,000 (Real Estate was booming) their house now has been valued at $142,000.

Another couple on retirement, bought their dream home for $400,000, that home is now valued at $85,000. As you can imagine these homeowners have had to make some hard decisions.

One gentlemansaid he loves his home. He can afford to keep it and he is going to, because he loves it and cannot bring himself to walk away. He bought this house for $1.2 million and it is now valued at $850,000. He is truly upside down on this house and the stress shows in his face.

In Arizona 50% of the homes are “Under Water.” In Nevada 65% of homes are “Under Water.” This means their mortgage is higher than the value of the house.

There are 11 million homes in America “Under Water” and that number is expected to double by next year.

The banks appear to be unwilling to negotiate these people’s mortgages and they’re forcing them to rethink the value and purpose of owning and to keep paying the mortgages on their homes.

There is a stigma of allowing a foreclosure to happen to your home and concern about how it will affect your credit rating. This is something these owners and many others are prepared to risk.

There is a company called Youwalkaway.com. This Company will walk you through the process of giving up your home, if that is the decision you have made. The manager was being interviewed and I think If I was making a choice I would want someone to give me a helping hand, to go into an area of business that I am not qualified to handle, to try to avoid too many mistakes.

I think Banks and Politicians are promoting the Stigma situation and immorality of not continuing with your mortgage. I think those establishments have a moral situation of their own.

If you are in trouble with your Mortgage or deciding to walk away from it I think getting advice is a good thing, it will give you peace of mind and help unshackled the emotional burden of the Stigma of what you are about to do.

There has been Companies like Morgan Stanley that walked away from real estate in San Francisco in peak times and I am sure they were not concerned about the Stigma of it. They would have made a financial decision.

The Banks in the last 10 years have made some bad financial decisions at the cost of many home owners, so in my opinion these “Walk Aways” in most cases are based on good financial decision.

Many people in the near future will be looking at the economics of their mortgage on their home, some realising they are paying for a “Lemon.”

On the News this morning it was announced that in the last 10 weeks the USA’s national debt has gone up 300 Billion Dollars America is now fast approaching 13 Trillion dollar debt.

These figure have to make you think. If you have a hard decision to make on a financial basis I think these national figures should help you make up your mind.

Right now is a time to get out of debt.

If you can afford real estate it is the best time to buy but don’t go over your head into debt.

SOURCE; 60 Minutes

SOURCE: You Walk Away

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  1. Pingback: Tweets that mention You Walk Away! « Lesley Voth -- Topsy.com

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