For many homeowners the American Dream has come to an end and they elect to hand their home keys to the mortgage lender and walk away, without consideration for credit consequences.
Our real estate market is not really showing, or even hinting at a any kind of recovery you can sink your teeth into.¬† Many homeowners are making some tough decisions today, based on the value of their homes.¬† We all know that foreclosures and short sales are driving the value of other properties down.¬† What do you do when you find out you owe much more on your home then it is worth?¬† Do you continue to stay there, pay the payments, insurance, taxes and upkeep?
Many homeowners are opting for the walk away plan.¬† They simply do just that, walk away from the property and hand it back to the bank.¬† Is this a wise move, will it hurt you in the long run, can you recover from a walk away?¬† A study that was done showed that in the last month a fifth of the properties notified for foreclosure, the owners chose to simply walk away.¬† This is happening more and more it seems.¬† There are those within the market who say there is no shame in walking away from a property that is clearly sinking, sort of like abandoning a sinking ship.¬† A new term has been thrown around lately, ‚Äústrategic‚Äù default. (Euphemism)
My thoughts on the walk away, or strategic default.
I think each homeowner must make that hard decision or what he or she see for the future.¬† Now there are many other factors one must take into consideration, job security, the current value vs the market value of your home.¬† Once you have all this information it is now up to you to make that decision to lower the life boat or find another pump.¬† It’s tough, regardless of how you look at it.¬† It is a scene that is being played out all across this country though.¬† It will only get larger as more and more foreclosures hit the market.¬† I still think we are in for some stormy seas in 2010 when it comes to our real estate market.