Here comes the next wave - & it’s really big -
By Daniel at 5 December, 2009, 11:17 pm
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“Is walking away smart if home underwater?
One expert says Americans would be ‘better off financially’ if they defaulted
The Associated Press
updated 2:16 p.m. CT, Fri., Dec . 4, 2009
NEW YORK - Stop paying your mortgage.
That’s the underlying message from a University of Arizona law professor, whose new paper is hitting a nerve as the nation’s housing crisis enters its fourth year.
Brent White denies advocating walking away from a mortgage that is bigger than the value of a home. Nonetheless, he lays out a case of how it can be done, and his suggestions have gone viral, popping up online, in newspapers and on television.
White is hardly first to talk about the idea of walking away from a mortgage that is bigger than the value of a home. Nonetheless, his suggestions have gone viral and are popping up online, in newspapers and on television.
It’s a move that can save some people money, but at the expense of wrecking their credit.
The topic is central to what’s crippling the housing market: About one in four homeowners, or 10.7 million Americans, are considered underwater, meaning their mortgage exceeds their home value, according to real-estate information company First American CoreLogic.
In the markets hardest hit by the nation’s housing bust Florida, Arizona, California, Michigan and Nevada the share of homeowners who are underwater is 40 percent.
“Millions of Americans would be better off financially if they did walk away,” says White, who authored the paper “Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis.”
www.msnbc.msn.com/id/34277720/ns/business-real_estate/
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