Wednesday, March 18, 2009

Expect More people to walk away from their mortgages

It's been over 1 1/2 years since the "credit crunch" began in August 2007, and things don't appear to be getting any better---It's as if the economy continues to chug along the road of "death by 1,000 cuts" and it doesn't help that so many home owners are underwater in their mortgages and considering walking away from their financial obligations.

Case in point, 2 recent stories:

  1. The New York Times recently wrote a piece that details the process from walking away from your home and how to play chicken with your mortgage lender.
  2. Detroit City Councilman Kwame Kenyatta has walked away from his house---According to the story, the councilman paid $225,000 for the property in 2004 and now it's only worth 100,000...
With the media and our politicians setting the stage for people to walk away from their home loans, you can bet that many more people will be doing the same in 2009... And once the mortgage resets ramp up in 2010 and 2011, the real estate market will continue to deflate.

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