My prediction is that many of the home owners that didn’t foreclose last year will definitely foreclose in 2010! You don’t need to be a rocket scientist to figure that out! The media is trying to convince us that the mortgage crisis is on its way to recovery. I don’t believe it, and from many of the home owners that I’ve talked to here in Los Angeles, they don’t believe it either!
This new group of foreclosures are the home owners that has been hanging on by the seat of their pants, hoping, praying, and monitoring the home values regularly, in hope of selling when the market indicates that they can at least payoff what they owe. They are not even thinking about profit now, just relief from the financial burden. The majority are in mortgages that are upside-down, meaning they owe more than the current market value!
The majority of home owners that purchased in the last 5 years will foreclose intentionally because their property is so upside-down. The owners that don’t have 10 to 15 years to twiddle their thumbs and wait until the market comes back to what they currently owe, will decide to pack up, and simply walk away from their property.
These home owners are the type of people that have always paid their bills on time, always paid their mortgage, never even thought about throwing in the towel. I know for sure that this is accurate, because I’m one that falls into this “walk-away” group. I’ve been sitting on the fence for a year, and I’m seriously considering renting a great place at the ocean in Los Angeles for $1,500.00 less than I’m putting out monthly mortgage payments!
I’m wondering how many of you reading this blog are thinking about deliberately walking away from your upside-down property?