The Plight of the Underwater Homeowner
In our May 2010 real estate issue
, writer Andisheh Nouraee shared what it was like living the life of an underwater homeowner.
If you're "underwater," it means you owe more on your home's mortgage than the home itself is worth.
also addressed the problem recently. The families highlighted in the piece agreed with many of Nouraee's points:
These people are making the choice to walk away from their mortgages, a "strategic default." Last year, 1 million people who couldn't afford to stay in their homes walked away, according to 60 Minutes
The piece first follows a couple who live on a "street of shattered
dreams"--sixteen of the forty-four houses on their street have been
foreclosed upon; their house will be number seventeen. Their attitude?
Let the bank have it. It's worth more than 43 percent less than they
bought it for, and the homeowners feel no guilt about walking away,
"especially after trying to talk to my lender," says the husband.
Another couple decided to walk away from their mortgage after it
began to feel like they were bailing out "an ocean with a bucket."
Here's how Nouraee responded to the piece:
"I found myself amen-ing the people in the 60 Minutes
ditched their houses and am inching closer making that same decision
myself. I've tried in vain to find a paying tenant. In the meantime, I
called my lender and begged them to consider lowering my interest
rate. They refused. It seems foolish on their part because they're far
more likely to keep me receiving payments from me if they bend a
little. I'm not asking the bank to give me money. I'm asking the bank
to profit slightly less from me. If I can't refinance at a lower rate
within a couple months, I think it's wisest for me to abandon the
house. I hate to do that to my neighbors, but I can't keep pouring
money down a hole."
It's a feeling a lot of Atlantans can relate to; almost a half-million metro homes are underwater. What do you think about homeowners walking away from their mortgages?
For those quick to judge, Nouraee makes an interesting point at the end of his essay:
"A low credit score is the lending industry’s way of calling someone a deadbeat. If defaulting on a $115,098.53 mortgage makes me a deadbeat, what do banks call the people who built the Mansion on Peachtree in Buckhead—a $197 million luxury high-rise that sold in a foreclosure auction in February for $66 million?"