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Choosing Foreclosure

By
Real Estate Agent with Keller Williams Realty Portland Premiere

It is said that 20% of home owners are "underwater" on their mortgages and more and more homes are going into foreclosure every day.  For many the best financial option is to let their home go into foreclosure instead of throw away thousands of dollars that the home has lost in value. 

The prediction is that most of these home owners will do just that but some think that people aren't always so rational. 

One reason is that people tend to over value their own home.  That makes it to valuable for them to just walk away from. 

Secondly, people tend to place greater importance on immediate consequences than they do the long term ones.  Walking away might help you out down the road but is a lot of pain and effort right now. 

Then there is the morality of it.  Some feel it is just plain wrong to walk away because if you borrowed the money, then you need to pay it back, it's that simple.  Check out this article with great real-life examples of home owners situations and what they intend to do about it.

http://money.cnn.com/galleries/2009/real_estate/0903/gallery.walking_away/index.html

PLEASE CHECK OUT OUR NEW PODCAST ON THE HOMEPAGE OF OUR WEBSITE http//:www.TonyandLibby.com & OUR NEW PORTLAND METRO BLOG AT http//:www.TonyandLibby.blogspot.com (make sure you leave comments)

Comments (2)

Not a real person
San Diego, CA

Although you and I might agree that "it is just plain wrong to walk away because if you borrowed the money, then you need to pay it back, it's that simple," it really is not that simple. Foreclosure is an option to get one's life back under control, and it's a legal option. Bankruptcy is the same thing, a legal option to get one's life back under control. After all, in many cases there are also extenuating circumstances, especially in this economy -- lost of a job, death or injury of a loved one, etc. It's not necessarily black and white.

Mar 09, 2009 09:02 PM
Tony and Libby Kelly
Keller Williams Realty Portland Premiere - Lake Oswego, OR
CRS, ABR, ePro, SRES, CLHMS, CDPE

I agree Russel.  Thanks for the comment and for reading our post.

Mar 10, 2009 12:34 PM