The newspapers and the internet are filled with news stories of families facing foreclosure as a result of being taken advantage of by a lender and/or real estate broker.  While I think we all are sadden when we hear them, there's a large group that deserve no ones sympathy.  Apparently, a new trend is emerging nationwide of homeowners letting their homes go into foreclosure intentionally and its absolutely astounding. 

The idea has evolved that since values in some areas around the country have dropped, homeowners who wish to sell are just letting their home go into foreclosure after they're stripped out the remaining equity and purchased another place.  The penalty for a foreclosure is a pretty heavy hit on your credit but they seem not to care.  Some are even going as so far as to open multiple credit cards and purchase new cars before they ruin their credit for the next few years.  About six months ago, the Charlotte observer reported on a woman locally who did such a thing and the sad part about it is that she could have sold her house but she chose not to.  This isn't a Charlotte issue as I've heard the same type of stories from Las Vegas, Washington DC, Florida, Detroit and more. 

So I guess the lesson here is that if values drop in your area, take all your money out and just walk away.  Can you imagine what it would be like if we applied the same irrational thinking to the purchase of a new car?  Just off the dealer lot would remain parked a bunch of brand new cars, keys inside, some vandalized but all left all because its not worth the same as what was paid for it just minutes ago.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate