I agree. The people we've known who have walked away from homes didn't do so lightly. One family that we know well tried everything, and all it amounted to was throwing away thousands of dollars trying to catch up missed payments for the bank to tell them it wasn't enough. Unless they could requalify for their loan (after several job losses, which made their employment history and credit rating both insufficient to do so) there was no way to avoid foreclosure. When the sale notice is posted on the door and you're looking at your child knowing that honoring your obligation to the bank will leave you with no way to scrape together a deposit for a new place to live, you choose the path that doesn't see your family homeless or your child's possessions thrown out on the lawn.
I think that we, living in Michigan, have seen a lot more of real life than the sensationalism that the rest of the country is seeing in the papers. Most of the people I know of who walked away from their houses did so last year when the banks said they would work with people, but didn't really. Lots of run-arounds, sending and re-sending in paperwork, phone calls where you were on hold for an hour only to be told to call again in two weeks, etc.
People have the idea that 60% of the housing market is a bunch of deadbeats living above their means. Based on what I'm seeing here in Michigan, I think that number is probably closer to 5%. Most, if not all, of the people I know (or have heard about) losing or lost their homes were people who had been in them for several years and then one or both spouses were laid off or had their companies fold.
Unemployment is $1,300 a month at the top of the range, which in many cases will maybe cover the mortgage but won't cover anything else. And THAT's if you made more than $30K per year. People who made under that got less in unemployment. It was infuriating to read judgmental posts here about how people should pay for health insurance at $600 a month because it was irresponsible to not carry insurance. Obviously, it was a choice between giving half of your monthly money to the health insurance companies or put food on the table for your family. The mortgage? Forget about it!
No flames here either. One thing we must remember is that a lot of times these articles are meant to show the absolutely "worse" traits because that's what sells. Sort of like the network news, it's more profitable to show the "lead and steel stories, (gunshot and knife murders) than the "local" interest stories.
There are thousands of hardworking americans who are on the ropes and just as many if not more who are 1 step away from disaster.
Hold to hope!
Absolutely. Unfortunately, people only read the headlines and worst case scenario articles, then go around telling anyone who will listen that their property values are going down because just about everyone who's lost their home is a deadbeat who treated their home like an ATM machine. #1 - it simply isn't true and #2 it's a small minority of people who actually did that.
Most people who've lost their homes were people who sacrificed for years doing everything they could to
keep their homes. But that reality doesn't sell in this day of 5 second sound bytes or 500 word news-ertainment blurbs.