Should I stay or should I go now

With millions of Americans facing financial hardship and difficulty making their mortgage payments, there comes a time when a homeowner has to decide whether they should continue to make their mortgage payments and burn up their reserves or stop making the payments and conserve their cash savings. The latter obviously will have a negative impact on credit and ultimately will put them at risk of foreclosure. So the burning question when faced with this dilemma is “Should I stay or should I go?”

The facts are that many people took cash out, borrowed more than they can afford, took teaser rates, or applied using some form of a stated income loan which would often over inflate the borrowers actual income through the home refinance or home purchase process. With the credit markets in shambles making difficult to refinance, home values plummeting and loan payments increasing, many people are finding themselves owing more than the property is worth and/or stuck with a mortgage payment that they simply can no longer afford to make each month. Many are choosing to simply walk away from their homes and allow the home to go into foreclosure and ultimately back to the bank. Is this the right move?

I don’t have the right or wrong answer here but I do know that up until the 90’s most people bought a house as a place to live and somewhere to stay and raise a family.  Now I understand that is a very Walton’s way of thinking but it’s the truth and we all know it.  Then came the mid 90s and homes began to rise in value a little quicker than the national average of about 7% a year.  Lending practices began to recover from the S/L crisis and a new way of thinking was born in the lending world.  Do you have a pulse?  Do you have a credit score?  Well then you clearly must be able to pay for a house.  At that point in time(the mid 90’s) housing prices were lower so from a relativity stand incomes could in theory support the median home price; so I guess stated income and teaser loans then MIGHT have been okay.  But the Achilles heel comes into play houses begin to appreciate and I’m mean fast and many Americans begin buying expensive toys and spending money they don’t really have.  To finance these toys then would take cash out via a home refinance or debt consolidation loan and here the cycle truly began my home as an ATM.

Fast forward about 10 years to 2008 we are all faced with the dilemma should I stay or should I go.  If I walk from my home I can buy another house in two years(in theory) based on current lending standards which if property values keep going down I can buy another house or maybe even buy back my existing house at half the price I used to owe on before I walked.  This is all true you can walk, you could buy your home for less, but do you really want to?  You knew what you were doing when you signed on the dotted line, what has changed since then; other then heightened media coverage on the housing market failures which is feeding consumers brains and giving them the food for thought on how to  walk away.   Again You knew what you were doing when you took the cash out home refinance, you knew what you were doing when you bought the home, don’t bring everybody else down even further as somewhere along the line we must just stop this madness.  Everyone always talks about being a leader and I wish that someone reading this article would become the leader and take a stand in their community, Stand like custard did at the battle of big horn, take a stand to save your house and do what is right; or we face the possibility of falling into a depression and don’t think for one minute that the thought is impossible.