On Walking Away
Is it okay to walk away from your mortgage for no other reason than it doesn’t make financial sense to keep throwing your hard-earned money away? There’s no universal answer here, but in most cases, the answer is “Yes.”Importantly, the reason is not that “Wall Street deserves it” or “We’ve got to teach the banks…
“if enough people do it, maybe the archaic notion of land and home ownership would cease to exist.
*rob*
Posted by: Butterfly at January 15, 2010 10:27 AM”
Get rid of that “archaic notion”, Rob, and civilization breaks down.
Right on tybur6!
Is anyone on this board anywhere near a situation to consider this? Meaning, very underwater on their mortgage. Put yourself in those watery shoes.
It’s ok to walk away. AND, there is plenty of evidence out there that people who do will have no problem renting another place afterwards. Plus, you can likely live mortgage/rent free in your place for up to 1.5 yrs.
This shouldn’t even be a discussion, Blodgett’s presented a pretty balanced take.
Folks who simply say “no” are silly, and if they were actually deep underwater I’m sure they’d think differently and actually weigh the pros and cons, with walking as a legitimate option to consier.
As DIBS notes, you have to be prepared to rent (and should probably have a place lined up through a friend, connection, or, gasp, parent before you walk on the mortgage), but I’m pretty sure this will only be a blot one’s credit report for 6-7 years, after which you should be able to rent from anyone — and even get another mortgage — no problem.
yes. people can do whatever they want. rules are meant to broken and systems destroyed. why is this even a question?
if enough people do it, maybe the archaic notion of land and home ownership would cease to exist.
*rob*
I get tired of this. Housing prices fluctuate. They go up, they go down. Right now it’s down. That does not mean it will never go up again. It may not go up very soon, nobody knows for sure when it will get better, but it eventually will. If you bought a home for the purpose of having a place to live, then you should remain and keep paying the mortgage. If you are tempted to walk away because you looked at a house as an ‘investment’ then I say you got what you deserved by losing money in it. There’s no moral obligation to keep paying…there are no morals written into contracts. I’ve said it a million times: A house is nothing more than a physical structure you like in a neighborhood in which you wish to live. Period. Houses are not investments.
Henry Blodgett is so wrong.
Roger Lowenstein wrote a great article in the Magazine section of the NYT last week… Why should underwater homeowners behave any differently from banks?
http://bk.ly/bjZ
It’s not about retribution, it’s about making the most sound decision. A mortgage is no longer a moral obligation — if it were, the banks would have to treat it that way. A mortgage is a contractual obligation with prescribed penalties.