Its OK to Walk Away From Your Home?

Let me first state that neither I nor Keller Williams Realty are advising homeowners to default on thier mortgage and homeowners should consider the legal, tax and financial consequences of doing so.

In a research paper written by Brent White, Associate Professor of Law, University of Arizona, Mr. White makes an argument as to why it makes sense to walk away from your mortgage. Mr. White makes some interesting points:

• Homeowners do not walk away due to shame and guilt associated with foreclosure and perceived fear of the consequences of foreclosure, even when those consequences are in actuality much less severe than most homeowners have been lead to believe.
• As of June 2009, more than 32% of all mortgaged properties in the U.S. were "underwater", meaning that the homeowner owed more on their mortgage than their home was worth.
• Mr. White, makes the argument that "Millions of U.S. homeowners could save hundreds of thousands of dollars by strategically defaulting on their mortgage." "Homeowners should be walking away in droves. But they aren't"

Wow, this is a gutsy article you can view the abbreviated version at http://blogs.wsj.com/developments/2009/10/30/its-ok-to-walk-away-a-law-professor-argues/

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