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“I’ve done the math, and it doesn’t make sense to pay the mortgage. I can rent the same house a block over for half of what I am paying. I am so far underwater that if I stay here, struggle, and make all the payments, in 10 years, I will merely be back to break even. Why bother?
Like all the big banks have all done, I’ve made the calculation that it is financially beneficial to default on the loan — so that is what I am doing. As Sonny was told in the Godfather, “This is business, not personal…”
To me, this article shows the increasing need for the government to do something about foreclosures and strategic foreclosures. Do you think what we've already done is enough? What are your thoughts?
http://www.ritholtz.com/blog/2010/06/walk-aways-nyt-version/
Tuesday, June 1, 2010
Strategic Foreclosures
Really good summary of a NYT study on homeowners choosing to foreclose. One guy summed up the decision very well:
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I have heard about people doing this in the Kalamazoo area as well. I mean it makes sense - they are going to end up struggling to pay twice as much as what the house is worth. The government definitely needs to do something to fix this because we have not seen the worst of it all yet.
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