How To Walk Away From Your Mortgage And Save Thousands Of Dollars Per Month
%img src="http://static1.businessinsider.com/%3C/p%3E%0D%0A%3Cp%3E/f?id=4b47a19400000000007468eb&maxX=346&maxY=259" /% Should you walk away from your mortgage?
That's a question millions of Americans should be asking if the home they bought during the housing bubble is now worth far less. Later this year, Moody's Economy.com estimates that 17.4 million homes will be "underwater."
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There are many factors to weigh, especially mortgage and payment modifications, but draining cash with big monthly payments for a home value that might never return can be a big waste, especially if there are less expensive rentals in the area.
But even when "strategic default" makes economic sense, many homeowners don't out of fear and guilt.
"A large number of Americans who are underwater on their mortgages would be better off financially if they walked away from their homes," says
Brent White, a University of Arizona real estate expert. "They don't because we have a double standard. individuals are told they have a moral obligation to pay their mortgages and corporations understand that contracts are to be breached when it's not economically efficient."
Not everyone agrees. "I've worked with a lot of homeowners and so I understand that perspective. But big picture. the whole idea that people are thinking it's a viable alternative is very bothering," says Shari Olefson, a real estate foreclosure attorney with Fowler White Boggs and author of Foreclosure Nation: Mortgaging the American Dream. "It all goes back to the issue of moral hazard."
Whichever side you take, it's good to know the default process and other available options.
See how to walk away and other options for your underwater mortgage -- >Source: www.businessinsider.com