The phenomenon gained popularity first in California, where many new trends seem to begin. With one of the highest foreclosure rates in the nation, many people are choosing to Walk Away from their properties when other alternatives to stop foreclosure have failed. An analysis of the situation reveals that many are regarding the choice as a "business decision". Property values have fallen so much and so fast that many homeowners feel they have no better alternative. Many owe far more on their mortgage than the home is worth in today's depressed market.

            In the past, homeowners who were feeling a financial squeeze simply went to their private ATM - their Home Equity. Now that the ATM is out of money (all of their equity has evaporated), they must find another solution. When credit was easy to get and home values were appreciating, many would simply refinance and pull cash-out to payoff bills. That is no longer an option for people who are "upside-down" in their home. This means that they owe more on the mortgage(s) than the home is worth.

            According to David Smith, a mortgage broker in Plymouth and Founder of U-Move-On, business has changed dramatically in the past year. "Until last summer, about 75% of my loans were for refinances. The majority of those loans also included cash-out which people used to pay-off credit cards, other loans, and other expenses like college or home improvement projects. Now that the value of their property has dropped so much, refinancing is no longer an option for many families."

            For people who have lost their jobs or seen their income reduced, this creates a huge problem. To make matters worse, the cost of even basic necessities keeps rising. The price of oil is now over $130 per barrel and we are on the brink of $4 per gallon gas. Even a trip to the supermarket costs a lot more than before.

            "People look to me for solutions for their financial needs", says Dave. "It's frustrating when you are working with clients who have always paid their bills on time and they can't qualify for a loan. The biggest problem is that they have little or no equity in their property. And with today's tightened lending guidelines, many programs that offered up to 100% financing are gone. They are faced with the reality that they need to sell their home and buy something less expensive. But even that can be difficult or impossible. It can take a year or longer to sell a home in today's market. Those that are selling are usually discounted heavily. Add in the Realtor's commission, closing costs, and moving expenses and it just doesn't work. Where does the money for the down payment on another house come from?"

            This scenario is common here in Michigan, where many workers have lost their jobs or seen their income plummet. The trickle-down effect is hurting virtually all businesses across Michigan and much of the nation. As a result, we continue to see foreclosures rising at an alarming rate.

            What do you do when you can no longer afford your house and refinancing or selling won't work? Many are deciding that it is best for them to walk away in order to cut their losses. Let's say, for example, that someone bought a house 3 years ago for $180,000. In today's market, that same house may only be worth $130,000. If the owner put 10% down and took a mortgage for the balance, then they still owe close to $162,000. How long will it take for the property value to bounce back? No one knows for sure, but the experts are predicting that values in many areas will continue to fall for the next year or two. For someone who can't afford their mortgage now, it makes no sense to struggle to make a payment on a house that is worth less every day.

            "For many people, walking away is a business decision", according to David Smith. "They have to do what is best for their family. This is something that businesses do all of the time. Auto companies, airlines, banks, and businesses of all types close facilities and make cuts to survive. Remember, the banks and mortgage companies made a lot of money making risky loans. Anyone who had a pulse could get a mortgage, often without proving their income or putting any money down. Now that the economy is in a recession, they are faced with a record number of foreclosures. Whose fault is it? Much of the blame falls on the lenders whose job it is to manage the risk. They made a business decision to make these loans because they were very profitable. Executives received their huge bonuses. Stockholders also reaped their rewards. Now, though, many homeowners are making a "business decision" themselves. It's called walking away and it is being done to cut their losses. Just like the auto companies and banks do."

            "I have spent over 30 years helping consumers find solutions to their financial needs", states Dave. "It is very frustrating not to be able to solve their problem like I have done in the past. The rules and playing field are so different today. I started to do research on foreclosure law 4 years ago and have now educated myself to the degree that I know more about the foreclosure process than most attorneys do. I also belong to 3 Real Estate Investing Associations that have taught me a lot about working with people facing foreclosure. There is a company in California called You Walk Away (www.youwalkaway.com) that I researched. They assist people in foreclosure that will be walking away by providing education, legal assistance, and credit repair. The cost of their program is $995. The company has been featured on ABC News, Good Morning America, CNN Money, The Wall Street Journal, The New York Times, The Washington Post, Bloomberg, and more. Despite all of this publicity, I had never heard of them before! Perhaps that is because they primarily work in California, Nevada, and Arizona. I searched the internet to find a similar company in Michigan, but could not locate any. There are lots of companies that promise to "Stop Foreclosure", but none with this unique business plan.

            Dave was convinced that there is a need for such a service here in Michigan, so he formed his own company called U-Move-On. They are based in Plymouth and serve the entire State of Michigan.

            "Our goal is to ensure that people facing foreclosure find the best possible solution. The first concern is to avoid foreclosure if possible. We provide a Free, 8 page e-Book on our website that discusses the major options to stop foreclosure. Some examples are: working with the lender, forbearance, loan modification, refinancing, selling (even if you owe too much), working with investors, and even bankruptcy. If one of these options solves the problem, that's great! Often, however, these options are exhausted and walking away becomes the best alternative."

            U-Move-On has a Foreclosure Survival Guide that will help the homeowner stay in their home as long as possible, save money, and provide education about their rights under the law. Because we are not attorneys, we provide access to an attorney for legal issues. The Guide also helps the client repair their credit, find a new home, and much more. You can learn more by visiting www.umoveon.com or by calling (734) 756-6050.