Property Foreclosure

[alphadore]

If I were you, I would stay. You say it is a nice house in a nice neighborhood.

[jasminhatcher]

If you like living there and you can afford it then you should stay. The property prices might go up, and even if they don't, its your home and you're comfortable in it.

[Snoopy2645]

I would stay property values will go up & they will go down like others have stated
you gotta live somewhere right & if you let it get forclosed there goes your credit which can be expensive too I know I have lived in my house for 12yrs I have seen the housing market go way up & go way down & back up one just never knows

[Eric80]

If you stay you have a nice house and you can afford it. If you sell you will still owe money on the property and have to find somewhere else to live and therefore will have to folk out two revenue steams and will waste more money into a different black hole. It is a recession at the moment and if you can ride it out then the value may increase in the future.

[PMMM]

Most of the data that I have seen indicates that it could be 10 to 15 years just to get even with the losses that the housing market has taken. Of course this is highly dependent on the geographical region of one's home.

In our state if you walk from your home the bank has no recourse except to take your home. In my neighborhood we probably have 150 homes and I bet at least 15 to 20 are siting empty. Some are divorce sales after the crises hit and they could not sell their homes. The vast majority are from walk aways due to price valuation decline.

Some of these people bought at the height of the boom. For instance a guy down the street paid $405K for a 2200 sq foot home. My home is the exact same house but with a lot that is about 2000 sq ft larger. I paid $242K for my house. He paid $405K. But now my house is valued by Zillow at $235,600 and his less than that. Luckily I still have equity in my house but I guarantee this guy does not. His house sits empty by the way. It's pretty disheartening to have owned a home for 8 years, I'm talking about mine now, and the value of the home is less than what I paid for it. And I bought before the horrific price increases.

I know another guy that bought a house about the same time that I did though his is a bit larger with a larger lot. He had a bogus type loan due to some credit issues when he bought. But in the effort to get out of that loan he took out another fixed rate 30 year loan but didn't read the fine print in his original loan and he had to pay a prepayment penalty plus he took some equity out of the house. He now owes $305K on a house he paid $265K for but is now only valued by Zillow at $256,300. His fault clearly and he knows it. But with a payment of $2300 per month and little or no chance of at least getting even for years and years, he's contemplating moving on. He can rent a place for $800 to $1000 less per month, he almost guaranteed to be able to stay in the house for a year without paying the mortgage and bank all that money. (He intends to pay debt off.) He's looking at it from a strictly business perspective. He views the home as an investment, the investment went bad. The bank says you pay me X per month or I take the house. He's saying hey the investment went bad so you can have the house. A business decision only.

Anyway, I just wanted to throw out there that there are many different situations that people go through. I really feel for the people that lose their homes because of job loss caused from by the recession. Me, I'm staying. My interest rate is 4.3% and I still enjoy some equity. Not a lot but I would pay the exact same amount I pay now to get the same size house in the rental market. I like my home and where I live although my wife want's a rambler. Good luck with that. It ain't going to happen. It's the fire sales in my neighborhood that is killing the values. My next door neighbor sold his house, which is the same size as mine for $205K. That kills your value.

Anyway, lots of tough situations out there and a lot of people are suffering. i just praise God I have a still have a job. (Our company was sold to a private equity firm 2 years ago.) I actually thought I would be history by now but so far I have managed to hang on. Luckily I have a couple years of living expense salted away. Most people do not and live paycheck to paycheck.

I have sympathy for those that lost homes through job loss. I have a tough time sticking up for those that made poor financial decisions or pulled all their equity out of their homes or just can't plain manage their money.

[Petunia 100]

Pmmm, your neighbor has a problem, though. The Mortgage Debt Forgiveness Act of 2007 specifically excludes cash-out refinances. Walking on that debt has tax consequences. His lender is also able to come after him for the cash-out, unless he is insolvent. He really should seek advice before he makes a decision.