This is a great video from CBS' 60 Minutes about the growing trend of people walking away from their home and mortgage, even though they can afford to stay - meaning they have enough income to stay.
A couple of things which caught my eye about this video, is the struggle of conscience people have and the steps they must take within themselves to embrace the "it's just a business decision" stance.
I myself struggle with the tension between personal responsibility for choices made in a market and contract situation and the business decisions to cut the losses and move forward.
I know as an appraiser, I am seeing these 50% drops in value from the last purchase in 2006 and 2007! Even if you CAN afford to pay the payments, every payment made I imagine would be a stinging reminder of that value loss!
I also noted WHERE the majority of walk aways were occurring:
Interesting to see FLORIDA as the greatest saturation of this trend!
Yet the lure of easy money in 2005-2006 and the idea of living within an hour's drive of either coast - sure made it easy for many to move, purchase, flip, get 2nd homes, etc, etc.
The question of WHEN this market will finally even out is still up in the air!
I recently noted many 'stable' conditions in my local markets where it would appear that the pricing has 'bottomed out'.
However, as more and more inventory continues to outpace sales, it makes me concerned we are ready for another drop down, especially if lenders make it difficult for new buyers to obtain financing!
So what do you think? If you CAN afford the payments, but are just so mad at your loss of value - is walking away a moral issue? Or is it just a business transaction?
And just because 'everyone else is doing it'....does that make it right?
I withhold judgment on this one as I certainly can see cases made for BOTH sides of this coin!
My hope is for rapid recovery for our markets, our nation, and our citizen's financial situations!
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