Realty Rocks

Posted By admin on January 28, 2010

I remember the 80’s when I purchased my first house. The pride I had in it and the future it represented to me. I was going to build equity and raise a family there. My Dad and I had discussed the options and despite a 13% ARM, I decided that I was able to afford the payments on the house even after the rate increased. So, I bought my first home, humble as it was. So many possibilities and real estate did not decline in value, it increased. After al l, hadn’t the great orator and humorist, Will Rogers had said “Buy land, cause they ain’t makin anymore of it.” That was good enough for me.

Two years after I closed on my house, the market had reduced the value of my house by 52%. I was looking at increasing payments and decreasing value. My neighbors were jumping ship at every opportunity. They were buying larger homes at greatly reduced prices and walking out on their mortgages. I looked on in amazed bewilderment. I could still afford the payments but the value was no longer there and I believed in creating equity. Should I follow suit? Should I stick it out? I was in a true quandary. These questions led me to place my house on the market and pray for the best. I was lucky. I found someone to take over payments and they moved into the house.

What has been happening in the last couple of years is not so different than the 80’s was. But now, they call leaving the property “Strategic Foreclosure”. It has become a financial strategy to review ones mortgage and foreclose if the formulas show it a detriment to one’s personal prospectus. There are actually people advising others on how to accomplish this feat. There is even a website that has a calculator to assist you in this decision.  http://www.youwalkaway.com/output24/InterectiveFlashCalculator.html

I do not advocate the use of “Strategic Foreclosure”, but I understand the personal financial benefits to the process. The problem lies in how it affects the world. Be assured, strategic foreclosures are having a negative impact as they ripple through on the economy. The longer people continue the pursuit of “Strategic Foreclosure”, the longer our economy will suffer. Please think twice before you foreclose without cause.

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