Did most people see the Phoenix area focused 60 Minutes report on mortgage walkaways? (Surprise: apartment complex, foreclosure)

[SOON2BNSURPRISE]

Lets understand this. You buy a home that you can afford. You make your payments each month. Your working and can make the payments that you signed up for. Prices decline and your homes value plumets. Your job is still secure and you can still make the payments on the home but you choose to walk away? Why? What changed in that scenario? To those that can make the payments I would like to ask how has the change in home value changed your personal economic situation if your monthly mortgage payment is the same? My thought is that if your income has maintainted its value, your payments are the same and not tied to an ARM then personally nothing is costing you any additional monthly cost.

[Bummer]

Originally Posted by SOON2BNSURPRISE

Lets understand this. You buy a home that you can afford. You make your payments each month. Your working and can make the payments that you signed up for. Prices decline and your homes value plumets. Your job is still secure and you can still make the payments on the home but you choose to walk away? Why? What changed in that scenario? To those that can make the payments I would like to ask how has the change in home value changed your personal economic situation if your monthly mortgage payment is the same? My thought is that if your income has maintainted its value, your payments are the same and not tied to an ARM then personally nothing is costing you any additional monthly cost.

Yep, SOON . . . blatant irresponsibility, isn't it?

Doesn't this scenario happen frequently with new vehicles yet most decent "adults" prefer to stick it out and honor their commitment.

[actinic]

Originally Posted by SOON2BNSURPRISE

Lets understand this. You buy a home that you can afford. You make your payments each month. Your working and can make the payments that you signed up for. Prices decline and your homes value plumets. Your job is still secure and you can still make the payments on the home but you choose to walk away? Why? What changed in that scenario? To those that can make the payments I would like to ask how has the change in home value changed your personal economic situation if your monthly mortgage payment is the same? My thought is that if your income has maintainted its value, your payments are the same and not tied to an ARM then personally nothing is costing you any additional monthly cost.

Because there's an opportunity cost. The same payments could go to some other place that's a much better deal and has greater appreciation potential, or, buy the nearly identical house next door for half the price, thus half the payments.

For those who are considerably underwater this can be tempting.

Let's face it, a home without equity is just a rental with debt.

[asufan]

Originally Posted by actinic

Because there's an opportunity cost. The same payments could go to some other place that's a much better deal and has greater appreciation potential, or, buy the nearly identical house next door for half the price, thus half the payments.

For those who are considerably underwater this can be tempting.

Let's face it, a home without equity is just a rental with debt.

Yep. If you have a $250,000 mortgage on a home that's worth $125,000, the odds are that you'll never dig out of that hole. It may harm how your family can live their life, whether or not you can afford to put your kids in college, you would have no flexibility to move if you wanted to, and you may have to work the rest of your life, instead of retiring at 65, or whenever. It's kind of a big deal, and we are only on this earth once, so why shackle yourself with something like that if the state allows you to get out of it?

Like I said, it's a business decision, and family comes before anything else, including banks and morals. If you can reduce your payment from $1,800 to $900 for the same house, and be in a better equity position eventually, it certainly would be tempting. So I can say that I understand why people do it. Luckily, I am not underwater on my mortgage, but if I were in the position that I described above, I have a feeling that I would be inclined to start over.

[smokemaster]

If you have a 300,000 loan on a 100,000 home; (30 year loan); the payments on 300K would pay off a 100K loan in about 5 years. 25 years of payments--that's a friggin' (first time I've ever used that word) long time! There are many in a similar situation here in the valley.

[dano]

Like I said, it's a business decision, and family comes before anything else, including banks and morals. If you can reduce your payment from $1,800 to $900 for the same house, and be in a better equity position eventually, it certainly would be tempting. So I can say that I understand why people do it. Luckily, I am not underwater on my mortgage, but if I were in the position that I described above, I have a feeling that I would be inclined to start over.[/quote]

When ever someone is telling me "it's a business decision" I know I'm about to get screwed.

[asufan]

Originally Posted by dano

When ever someone is telling me "it's a business decision" I know I'm about to get screwed.

Explain, dano. How are you getting screwed?

[smokemaster]

when someone says "It's not about the money".........guess what?

[dano]

Because it's a way to explain away unethical behavior. Would like to write more but one sentence pretty much does it.

[asufan]

Originally Posted by dano

Because it's a way to explain away unethical behavior. Would like to write more but one sentence pretty much does it.

Like I said, family comes before anything, including morals and ethics. Especially since 1. The state allows it, and 2. The very banks that hold these mortgages are "guilty" of the same mortgage practices over and over again. I would love for there to be some recourse, even if is as small as 10-20% re-payment of the losses, but that doesn't exist now, so it makes absolute sense from a mathematic and investment standpoint. People that think to the future realize that this is the best path in cases where they are substantially underwater, especially in less desirable markets like Buckeye, Surprise and San Tan Valley that will take many years to recover.