Real Esate Blog

I'm always reading to stay on top of my business. A day or so ago I read an article that really upset me, and I have no answer. The article was covering something new in the foreclosure arena. According to the article, some home owners who find themselves upside down in their homes are actually "turning in their keys" to their lender. No, they are not unable to pay their mortgage, they are just getting out of a home they owe more on, than it is worth. Transferring their problem to their lender! This is mostly confined to California, Las Vegas and Florida right now, where values have decreased 30% or so. Sure, it hurts their credit for a period of time, but not that long. A foreclosure is on their record for 7 years, but you can buy another home after only 2-3 years if you get your credit in good shape, and that is easier to do without the large mortgage payments. I guess it makes financial sense, but shows little or no responsibility for the home owners actions. Yes, it will take years, who know how many, to recoup the homes loss of value, but is it right to pass this off on the lender? I think not. 

I might mention, the home owner they were using as an example bought a home in '06 for $425,000. His homes current value is only $285,000. Wow, what a hit!!