Yesterday's Seattle Weekly's Nina Shapiro posted to Daily Weekly about her cover story in print this week, "Tales From the Bust." The post discusses homeowners frustrated by the fact they owe far more to the bank than their homes are now worth who decide to simply stop paying their mortgage.
In a strange sign of the times, in many instances the bank doesn't really want the home either - meaning the non-mortgage-paying homeowners end up getting to stay put, cost-free, for months at a time.
As Shapiro's post notes:
As property values have declined year after year, more and more homeowners have realized that they owe far more on their mortgage than their home is worth. Witness an engineer named "Jane," who bought a condo in Renton for $175,000 in 2008. It may now be worth as little as $60,000 or $70,000, such has been the hammering of south King County's condo market.
And so Jane and her husband, also an engineer, have decided to stop paying their mortgage and let the bank foreclose. They made the decision to "strategically default," as it's called in the case of relatively affluent homeowners, with the full blessing of their attorney, whose advice can be summarized thusly: "Walk away, right now!"
It's a slow motion walk, though. Banks, which in many cases banks don't want the properties either, are taking literally years to foreclose. So homeowners can continue to stay put with, as one lawyer says, "zero housing costs."
Not surprisingly, stories like this stirred the emotions of readers.
Commenter Guest Editor chimed in:
These selfish a-holes are intentionally killing the value of other properties in their areas and hurting the recovery. Another example of the well off not taking their lumps. What happened to accountability? Anyone that does this and can't prove they are actually insolvent should be prosecuted.