Is Walking Away From Your Mortgage OK?

IS WALKING AWAY FROM YOUR MORTGAGE OK? THE CURRENT STATE OF THE FORECLOSURE CRISIS WHO'S UNDERWATER? An estimated 2.5 million homes have been lost to foreclosure since 2005. According to RealtyTrac Inc., nearly 93,000 properties in July 2010 were repossessed, an increase of 6% from July 2009 More than 11 million families, a quarter of all families with mortgages, are in "negative equity," meaning they owe more on their home than it's worth. = 1 million homes 田田 田田 田 BANK More than 5 million 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 N/A 0-10% 10.1-20% 20.1-30% 30.1-40% 40.1-50% 50.1+% 6.4 15.5 18.5 37.3 6.2 All 18-29 30-49 50-64 20% 65+ 21% 18% 25% 15% 41% 18.4 35% 34.7 23.8 18% 11.3 47.9 Employed 20% Unemployed 38% Whites Blacks Hispanics 24 - - . 133% 29% Less than $30,000 $30,000-S49,000 44.7 19% 15% $50,000-$74,000 $75,000+ WALKING AWAY SHOULD YOU BE CONCERNED ABOUT WALKING AWAY? 25 percent of renters and 17 percent of homeowners believe it is acceptable to walk away from mortgage payments. Although the mortgage industry is telling homeowners there is a "moral obligation" to pay, there is no universal answer to whether it is wrong or ok to walk away from a mortgage. In many cases the contract made between a homeowner and lender does not say that the homeowner has a "moral obligation to pay", making it ok for the homeowner to walk away from the mortgage. 17% 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." Renters Homeowners WHAT AMERICANS SAY ABOUT STOPPING PAYMENTS ON A MORTGAGE Is it acceptable to "Walk away" from a mortgage? Men Age 18-29 19% Acceptable 21% Acceptable 9% Circumstantial Not Acceptable 68% 17% Depends Age 30-49 59% Unacceptable 20% Acceptable 5% Don't know 16% Circumstantial 13% Acceptable Circumstantial Not Acceptable 60% 22% Not Acceptable 60% Percent saying it is "acceptable" to stop making mortgage payments, by current financial situation Women Age 50-64 21% 19% Acceptable Living 14% comfortable Circumstantial Not Acceptable 54% Meet expenses, 19% with a little left over Age 65+ Just meet 25% basic expenses 13% 22% Acceptable Circumstantial Don't have enough 22% 20% Acceptable Circumstantial Not Acceptable 17% 59% 57% to meet expenses Not Acceptable Sources: http://pewsocialtrends.org • http://www.mbaa.org• http://online.wsj.com IS WALKING AWAY FROM YOUR MORTGAGE OK? THE CURRENT STATE OF THE FORECLOSURE CRISIS WHO'S UNDERWATER? An estimated 2.5 million homes have been lost to foreclosure since 2005. According to RealtyTrac Inc., nearly 93,000 properties in July 2010 were repossessed, an increase of 6% from July 2009 More than 11 million families, a quarter of all families with mortgages, are in "negative equity," meaning they owe more on their home than it's worth. = 1 million homes 田田 田田 田 BANK More than 5 million 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 N/A 0-10% 10.1-20% 20.1-30% 30.1-40% 40.1-50% 50.1+% 6.4 15.5 18.5 37.3 6.2 All 18-29 30-49 50-64 20% 65+ 21% 18% 25% 15% 41% 18.4 35% 34.7 23.8 18% 11.3 47.9 Employed 20% Unemployed 38% Whites Blacks Hispanics 24 - - . 133% 29% Less than $30,000 $30,000-S49,000 44.7 19% 15% $50,000-$74,000 $75,000+ WALKING AWAY SHOULD YOU BE CONCERNED ABOUT WALKING AWAY? 25 percent of renters and 17 percent of homeowners believe it is acceptable to walk away from mortgage payments. Although the mortgage industry is telling homeowners there is a "moral obligation" to pay, there is no universal answer to whether it is wrong or ok to walk away from a mortgage. In many cases the contract made between a homeowner and lender does not say that the homeowner has a "moral obligation to pay", making it ok for the homeowner to walk away from the mortgage. 17% 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." Renters Homeowners WHAT AMERICANS SAY ABOUT STOPPING PAYMENTS ON A MORTGAGE Is it acceptable to "Walk away" from a mortgage? Men Age 18-29 19% Acceptable 21% Acceptable 9% Circumstantial Not Acceptable 68% 17% Depends Age 30-49 59% Unacceptable 20% Acceptable 5% Don't know 16% Circumstantial 13% Acceptable Circumstantial Not Acceptable 60% 22% Not Acceptable 60% Percent saying it is "acceptable" to stop making mortgage payments, by current financial situation Women Age 50-64 21% 19% Acceptable Living 14% comfortable Circumstantial Not Acceptable 54% Meet expenses, 19% with a little left over Age 65+ Just meet 25% basic expenses 13% 22% Acceptable Circumstantial Don't have enough 22% 20% Acceptable Circumstantial Not Acceptable 17% 59% 57% to meet expenses Not Acceptable Sources: http://pewsocialtrends.org • http://www.mbaa.org• http://online.wsj.com IS WALKING AWAY FROM YOUR MORTGAGE OK? THE CURRENT STATE OF THE FORECLOSURE CRISIS WHO'S UNDERWATER? An estimated 2.5 million homes have been lost to foreclosure since 2005. According to RealtyTrac Inc., nearly 93,000 properties in July 2010 were repossessed, an increase of 6% from July 2009 More than 11 million families, a quarter of all families with mortgages, are in "negative equity," meaning they owe more on their home than it's worth. = 1 million homes 田田 田田 田 BANK More than 5 million 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 N/A 0-10% 10.1-20% 20.1-30% 30.1-40% 40.1-50% 50.1+% 6.4 15.5 18.5 37.3 6.2 All 18-29 30-49 50-64 20% 65+ 21% 18% 25% 15% 41% 18.4 35% 34.7 23.8 18% 11.3 47.9 Employed 20% Unemployed 38% Whites Blacks Hispanics 24 - - . 133% 29% Less than $30,000 $30,000-S49,000 44.7 19% 15% $50,000-$74,000 $75,000+ WALKING AWAY SHOULD YOU BE CONCERNED ABOUT WALKING AWAY? 25 percent of renters and 17 percent of homeowners believe it is acceptable to walk away from mortgage payments. Although the mortgage industry is telling homeowners there is a "moral obligation" to pay, there is no universal answer to whether it is wrong or ok to walk away from a mortgage. In many cases the contract made between a homeowner and lender does not say that the homeowner has a "moral obligation to pay", making it ok for the homeowner to walk away from the mortgage. 17% 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." Renters Homeowners WHAT AMERICANS SAY ABOUT STOPPING PAYMENTS ON A MORTGAGE Is it acceptable to "Walk away" from a mortgage? Men Age 18-29 19% Acceptable 21% Acceptable 9% Circumstantial Not Acceptable 68% 17% Depends Age 30-49 59% Unacceptable 20% Acceptable 5% Don't know 16% Circumstantial 13% Acceptable Circumstantial Not Acceptable 60% 22% Not Acceptable 60% Percent saying it is "acceptable" to stop making mortgage payments, by current financial situation Women Age 50-64 21% 19% Acceptable Living 14% comfortable Circumstantial Not Acceptable 54% Meet expenses, 19% with a little left over Age 65+ Just meet 25% basic expenses 13% 22% Acceptable Circumstantial Don't have enough 22% 20% Acceptable Circumstantial Not Acceptable 17% 59% 57% to meet expenses Not Acceptable Sources: http://pewsocialtrends.org • http://www.mbaa.org• http://online.wsj.com IS WALKING AWAY FROM YOUR MORTGAGE OK? THE CURRENT STATE OF THE FORECLOSURE CRISIS WHO'S UNDERWATER? An estimated 2.5 million homes have been lost to foreclosure since 2005. According to RealtyTrac Inc., nearly 93,000 properties in July 2010 were repossessed, an increase of 6% from July 2009 More than 11 million families, a quarter of all families with mortgages, are in "negative equity," meaning they owe more on their home than it's worth. = 1 million homes 田田 田田 田 BANK More than 5 million 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 N/A 0-10% 10.1-20% 20.1-30% 30.1-40% 40.1-50% 50.1+% 6.4 15.5 18.5 37.3 6.2 All 18-29 30-49 50-64 20% 65+ 21% 18% 25% 15% 41% 18.4 35% 34.7 23.8 18% 11.3 47.9 Employed 20% Unemployed 38% Whites Blacks Hispanics 24 - - . 133% 29% Less than $30,000 $30,000-S49,000 44.7 19% 15% $50,000-$74,000 $75,000+ WALKING AWAY SHOULD YOU BE CONCERNED ABOUT WALKING AWAY? 25 percent of renters and 17 percent of homeowners believe it is acceptable to walk away from mortgage payments. Although the mortgage industry is telling homeowners there is a "moral obligation" to pay, there is no universal answer to whether it is wrong or ok to walk away from a mortgage. In many cases the contract made between a homeowner and lender does not say that the homeowner has a "moral obligation to pay", making it ok for the homeowner to walk away from the mortgage. 17% 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." Renters Homeowners WHAT AMERICANS SAY ABOUT STOPPING PAYMENTS ON A MORTGAGE Is it acceptable to "Walk away" from a mortgage? Men Age 18-29 19% Acceptable 21% Acceptable 9% Circumstantial Not Acceptable 68% 17% Depends Age 30-49 59% Unacceptable 20% Acceptable 5% Don't know 16% Circumstantial 13% Acceptable Circumstantial Not Acceptable 60% 22% Not Acceptable 60% Percent saying it is "acceptable" to stop making mortgage payments, by current financial situation Women Age 50-64 21% 19% Acceptable Living 14% comfortable Circumstantial Not Acceptable 54% Meet expenses, 19% with a little left over Age 65+ Just meet 25% basic expenses 13% 22% Acceptable Circumstantial Don't have enough 22% 20% Acceptable Circumstantial Not Acceptable 17% 59% 57% to meet expenses Not Acceptable Sources: http://pewsocialtrends.org • http://www.mbaa.org• http://online.wsj.com IS WALKING AWAY FROM YOUR MORTGAGE OK? THE CURRENT STATE OF THE FORECLOSURE CRISIS WHO'S UNDERWATER? An estimated 2.5 million homes have been lost to foreclosure since 2005. According to RealtyTrac Inc., nearly 93,000 properties in July 2010 were repossessed, an increase of 6% from July 2009 More than 11 million families, a quarter of all families with mortgages, are in "negative equity," meaning they owe more on their home than it's worth. = 1 million homes 田田 田田 田 BANK More than 5 million 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 N/A 0-10% 10.1-20% 20.1-30% 30.1-40% 40.1-50% 50.1+% 6.4 15.5 18.5 37.3 6.2 All 18-29 30-49 50-64 20% 65+ 21% 18% 25% 15% 41% 18.4 35% 34.7 23.8 18% 11.3 47.9 Employed 20% Unemployed 38% Whites Blacks Hispanics 24 - - . 133% 29% Less than $30,000 $30,000-S49,000 44.7 19% 15% $50,000-$74,000 $75,000+ WALKING AWAY SHOULD YOU BE CONCERNED ABOUT WALKING AWAY? 25 percent of renters and 17 percent of homeowners believe it is acceptable to walk away from mortgage payments. Although the mortgage industry is telling homeowners there is a "moral obligation" to pay, there is no universal answer to whether it is wrong or ok to walk away from a mortgage. In many cases the contract made between a homeowner and lender does not say that the homeowner has a "moral obligation to pay", making it ok for the homeowner to walk away from the mortgage. 17% 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." Renters Homeowners WHAT AMERICANS SAY ABOUT STOPPING PAYMENTS ON A MORTGAGE Is it acceptable to "Walk away" from a mortgage? Men Age 18-29 19% Acceptable 21% Acceptable 9% Circumstantial Not Acceptable 68% 17% Depends Age 30-49 59% Unacceptable 20% Acceptable 5% Don't know 16% Circumstantial 13% Acceptable Circumstantial Not Acceptable 60% 22% Not Acceptable 60% Percent saying it is "acceptable" to stop making mortgage payments, by current financial situation Women Age 50-64 21% 19% Acceptable Living 14% comfortable Circumstantial Not Acceptable 54% Meet expenses, 19% with a little left over Age 65+ Just meet 25% basic expenses 13% 22% Acceptable Circumstantial Don't have enough 22% 20% Acceptable Circumstantial Not Acceptable 17% 59% 57% to meet expenses Not Acceptable Sources: http://pewsocialtrends.org • http://www.mbaa.org• http://online.wsj.com