More and more often I am being told that walking away from my mortgage might be a feasible option to getting myself into a single family home in the near future. With the housing market turned upside down I am falling into negative territory on the value of my home. I’m lucky that I am not in a position where I am struggling to make my existing mortgage payments but the downturn in the housing market is keeping me from selling my town home and upgrading to a single family home.
It’s a great time to buy right now with the surplus of foreclosed homes and low interest rates and I want to take advantage of that. But if I cannot sell my current home now for atleast what I paid for it I am going to be stuck here until the market turns around. That’s a depressing thought considering that is at least 2 years out from now. Apparently, living in California has an upside if you haven’t been to much of a credit criminal and refinanced your original mortgage. It’s a scary concept but one that may make sense for some people.
The following excerpt is from an article on CNNMoney.com, the link to the full article follows:
California is a bit of a safe haven for these borrowers, since banks that repossess and then sell a foreclosed property for less than the mortgage that was owed on it cannot come after borrowers for the difference – as long as it’s the initial mortgage, one that has not been refinanced. So if a borrower owes $200,000 and the bank sells the house for $170,000, the borrower comes out of it debt-free.