Would you walk away from your home if financially underwater?
Wake up and good morning. Would you walk away from your home and mortgage obligations if you were seriously underwater -- owing much more on your home loan than your house is currently worth? That questions gets asked often in this great recession because economic circumstances keep changing. The longer the recession lasts, the longer people cannot find work that pays enough, the more likely we'll see a growing percentage of folks call it quits and walk away from their homes.
For example. a record number of homeowners lost houses to their banks in August as lenders worked through the backlog of distressed mortgages, real estate data company RealtyTrac said on Thursday. Read more here.
Consider the situation of Floridian Jeffery Horton, 33, who told Bloomberg News he stopped payments in October on a three-bedroom house and a one-bedroom condo he owns in Winter Garden, Fla. After his lenders refused to negotiate a loan modification, he decided the properties weren’t worth keeping.
"I’m not the first person in history to walk away from a bad deal," said Horton, who works as a network administrator for a student-housing developer. "To me, the most frustrating thing is feeling trapped." Read the Bloomberg story here.
A new Pew Research survey gives us a snapshot of where people's minds are on this thorny issue. According to Pew, a majority of Americans Still say it is "unacceptable" for homeowners to stop making their mortgage payments and abandon their homes. But more than a third (36%) say the practice of "walking away" from a home mortgage is acceptable, at least under certain circumstances. And nearly six-in-ten (59%) believe it is wrong for homeowners to deliberately stop paying their mortgages and surrender their homes to the mortgage lender. That's according to the survey of 2,967 adults conducted May 11-31.
Here's the complete Pew survey.
-- Robert Trigaux, Times Business Columnist