Show Entire Article
There’s a growing debate in the real estate community concerning the phenomenon of homeowner “walkaways”: Borrowers who can afford their mortgages, but decide to stop making their monthly payments because their home is now worth less than the value of their mortgage.
Some are even calling it “jingle mail” because of the sound your keys supposedly make when you mail them back to your lender. Do these borrowers really represent a meaningful percentage of today’s foreclosure numbers?
There is no real hard data yet, but analysts, bankers and even government types like Treasury Secretary Henry Paulson are warning about the supposed new trend. There was a fascinating article in the Financial Times back on January 31st that discussed the new mindset of today’s borrowers: “…it has become culturally more acceptable this decade for people to abandon houses or stop paying in the hope of renegotiating their home loans. The shame that used to be associated with losing a house may, in other words, be ebbing away.”
An article in the LA Times last Sunday points out that the numbers are “hard to quantify,” and not even the Mortgage Bankers Association can produce any figures. That’s why some call it an urban legend, perpetuated by all sorts of folks who rejoice in scaring everyone about the housing market.
Page 1 of 3 | Next PageShow Entire Article
More Top Stories