I’ve been battling bronchitis for the last two weeks and haven’t been my peppy self. Hopefully this new dose of antibiotics I’m taking will kick its butt. However, I’m still dragging myself into work….of course that might be my problem. But I overheard the most irresponsible comment today at lunch, and I just had to post on it.
“Their accountant told them that everybody’s credit will be effected by the housing market since so many people are walking away from their homes and that they’ll be in the same boat as everyone else. So, they might as well short sale their house. They haven’t paid their mortgage in 8 months.”
This was a comment I heard of others discussing buying and selling their homes. One lady made this comment, quite lightly, about her son (I think) with the impression that it was fine since “everybody else was doing it.” She even went on to say that [her son] had a good job and could afford the mortgage payments, but because their property was no longer worth what they purchased it for, it was in their best interest to short sale it.
I also know someone very close to me that has decided to “strategically” default because they are no longer happy with the price they paid for their home. They hemmed and hawed over the decision. And, since a mortgage broker wouldn’t talk to them until they defaulted, they decided to take that initial step and default. I don’t know if they will eventually follow through or not; they are under the impression that they’ll be able to buy another house in a couple of years for half the price. (Oh yeah! Let’s reward irresponsibility! Oh, wait. That’s me being snarky.) Once they find out how long it will take to repair their credit, they may decide otherwise.
In my opinion, this sounds like the exact reason we’re in this mortgage mess and one of the reasons our economy is so pitiful. It’s the “everybody else is doing it” syndrome. It’s hard for me to believe that walking away from a home is a good thing. Especially if the owner can afford the payments!
What do you think? Is this just fine and dandy? Should defaulting homeowners suffer any consequences? They knew when they signed the dotted line how much the total cost of the house/townhouse/condo was. Are they predicting a future where they’ll be able to easily land a brand new house as easily as they did the first time around?
P.S. I predicted 4 years ago that home prices wouldn’t keep going up. I’m not a psychic, I’m just a realist….tune in later for my psychic predictions of where this market is going.