We must do more for responsible homeowners who are underwater.
Here in Florida, a place synonymous with bad real estate and mortgage decision-making that has consequently seen steep declines in home value, I’ve been noticing yet another troubling trend.
Owners of homes worth less than their mortgage loan balance–those so-called “underwater,” “negative equity” or “upside down” homes–are walking away from their properties. These are people not unlike the radiologist who recently called me inquiring about ways he might be able to avoid paying his $2 million mortgage when his home is now only worth $1.5 million, even though he earns over $500,000 a year and can easily afford to make his mortgage payments. These homeowners are still employed, still able to make the payments on their homes, but have realized that, from a financial standpoint, it’s simply not worth it for them to stay put.
