Walking Away From Foreclosures

April 23rd, 2008 | Tags: Foreclosure Crisis

The tendency is picking up – house owners unable to continue with mortgage blues just walk away from the foreclosure crisis by handing over the keys to banks. But the house is not just brick and mortar – it is a home full of personal touches and memories. It is impossible to walk away from a house that has been a home for many years. Some people tend to return to it as tenants. But others go away with a sigh. At any cost – the aim is to avoid foreclosure or rather the stigma of foreclosure that will hound the individual for years and years.

There are many who have not been served the actual foreclosure notice as yet but life under the dark shadow of adjustable rate mortgages becomes a nightmare. There is always a fear that any day the interest rates will start spiking. With rising food and fuel prices, as it is survival, has become a tough job. If furthermore rates increase there is no alternative but to just walk away. The situation is computed further with divorces and exorbitant medical bills if not death tragedy – something that can happen to any family any time.

There are many who are current in their payments but in two years the value of the property has dropped by nearly 25%. That makes it impossible to sell the house and somehow salvage the situation. Yet family members increase in the case of young nest builders. Where will they find the space to live and move? The perky question is that since stock market investors often walk away from losses why cannot house owners do the same?

Speaking on the issue, Gail Cunningham of National Foundation for Credit Counseling said that a foreclosure has a tendency to stick on to the bad credit history of a person like glue even after the stipulated seven years. Long after it stops affecting the credit rate, future lenders will glance at the past history with suspicion. Easy affordable loans will not be available. In fact loans might completely be blocked. The foreclosure crisis has led to a return to traditional loan giving. One has to be really credit worthy to avail of a loan. Thus her concluding remarks are to avoid foreclosures come what may.

Our society is a credit dominated one. It is a credit culture we live in. Credit ratings are our assets.