That is exactly what some self proclaimed experts would want you to do. There has been a lot of buzz coming from a few individuals (with the means to reach millions) who posted that walking away is something homeowners should seriously consider. I refuse to name them or post a link to that source because I do NOT want to help them receive any additional publicity.
Can you potentially escape from what may "appear" to be a losing situation? Maybe. However, advising homeowners to walk away is irresponsible...especially without outlining all of the negatives associated with that course of action.
Those negatives are as follows...
* The housing market would continue to decline.
* Banks would have additional non-performing assets on their books and would be less willing to lend.
* The foreclosure would remain on the homeowners' credit report for 7 years.
* Fannie Mae will not back another loan for that borrower for at least another 5 years after the foreclosure.
* In my opinion, you didnt actually lose money until you walk away or sell. Once you walk away or sell, you realize the loss.
These are just a few of the negatives that would be associated with walking away from an underwater home. On the surface, there MAY appear to be a short term savings. However, long term it just does not make sense.
Over the next few days I am going to think about a positive twist on the concept of walking away. A scenario where it makes sense for the housing market. I will post that argument if there is one.
What do you think?
Comments (0)Subscribe to CommentsComment