Seems like many in the main stream media are finally coming to the reality that walking away from your mortgage may be the best thing for you to do depending on your situation. 

For months now we have heard the bullshit line from the administration and concerned economists that walking away is somehow "immoral" or "wrong".  A mortgage is nothing more than a contract.  By walking away you are not getting off scott free.  You are losing your home.  Just as if you stop paying on your car, the repo man is going to come and get it.  You lose your car and your credit.  Same principal on your home but on a much larger scale.  Face it folks, if you are upside down on your mortgage by $100,000 it may take you 15 years to recover from that.  Maybe longer. 

It is realistic to think that it may be in your best interest to walk away, give the keys back to the bank, take the hit on your credit and start over. 

If it is OK for Morgan Stanley to do it (with a default on five commercial buildings in San Francisco) and it is OK for Tishman Speyer and BlackRock to do it (walking away from the $5 billion project at Peter Cooper Village), how is it any more wrong for individual home owners to do it?

The fact of the matter is if it is OK for commercial banks and investors to walk away and chalk it up to "making a business decision" it should be OK for an individual to do the same. 

I know the argument.  Walking away hurts others in your neighborhood as foreclosures and bank owned properties tend to depress real estate values for the other homes in the area.  Well, the same is true for commercial real estate. 

As always, consult an attorney for your own specific situation to figure out what is best for you. 

Tags: Housing Crisis Walk Away Mortgages