Is it OK to Walk Away from Mortgage Payments

IS WALKING AWAY FROM YOUR MORTGAGE OK? THE CURRENT STATE OF THE FORECLOSURE CRISIS WHO'S UNDERWATER? An estimated 2.5 milion homes have been lost to foreclosure since 2005. to RealtyTrac Inc., nearly 93,000 properties in July 2010 were repossessed, an increase of 6s trom July 2009. More than 11 milion families. a quarter of all families with mortgages, are in negative equty meaning tmey owe more on their home than its worth. -1 milon homes DANK More than 5 milion borrowers are more than 25% underwater. That is equivalent to having a $100,000 loan for a property now worth $75,000 or less NEGATIVE EQUITY OF UNDERWATER BORROWERS (2009) UNDERWATER HOMEOWNER DEMOGRAPHICS Age Group 0-10% 10.1-20% 20.1-30% 30.140% 40.1ses s01% NA 15.5 18-29 18% 30-49 25% All 50-64 65. 21% 20% 15% 35% 41% 184 347 IL 47.9 Employed 20% Unemployed 38% Whites Blacks Hpanics Less than $30,000 I 133% 29% $30.000 40.000 S50,000-574,000 S75,000 19% 15% WALKING AWAY SHOULD YOU BE CONCERNED ABOUT WALKING AWAY? 25 percent of renters and 17 percent of homeowners believe tis acceptatle to walk away from mortgage payments. Athough the mongage industry is telling homeowners there is a "moral obligaion" to pay. there is no universal answer to whether it is weong or ok to walk away from a mortgage. In many cases the contract made between a homeowner and lender does not say that 17% the homeowner has a moral obligation to pay", making it ok for the homeowner to walk away from the mongage. 25% Regarding the legal consequences of walking away, the Wall Street Journal states, "Check with a lawyer before doing anything, but the consequences will probably be more limited than you think.