The American dream, of owing your own home and keeping it forever, has definitely changed. The sub-prime crisis has collided with changing societal mores into what looks like “the perfect storm.”

According to Inman News, and as reported on “60 Minutes” some homeowners have decided to walk away from their homes just because they have no equity and, consequently, don’t want to make their mortgage payments even though they could afford to do so.

The negative consequences for walk-away homeowners have become so minimal that the decision to ditch a burdensome home and oversized mortgage seems to make a strange kind of good economic sense.

In non-recourse states, lenders can’t pursue former homeowners for unpaid mortgage debt after foreclosure. And now that much of this forgiven debt can be excluded from taxable income, those who walk-away from a mortgage often can avoid the federal income tax liability as well. Not even the all-mighty Internal Revenue Service can touch these folks.  Read the full article for more ….

Tags: foreclosures, real estate trends

Posted in Legal Action, Historical Perspective, Market Trending | No Comments