Saturday, February 09, 2008

Should Ya Be a "Mortgage Walker"??

The WSJ had an Op-Ed on the subject Friday. The point of the article is essentially that an increase in people just leaving homes once they get behind on a mortgage is sort of the proper flow of the "market." In the author's view it's rational behavior:

Borrowers acted rationally in response to market forces and incentives during the bubble: Buy a house because prices always go up; you can't lose. Many are acting rationally now: Mail the keys back and un-borrow the money, because prices are sinking fast while the debt isn't. When the house was purchased not as a first home but as a rental investment, the decision is even easier.

If it's not a place you want to live and you don't expect the price to ever bounce back (can you say Detroit), I think the wise move is to leave.


At 6:25 AM, Blogger sp6264 said...

The IRS should get involved with this "mortgage walker" stuff. These people have behaved more like renters than owners and shouldn't have been entitled to tax breaks on mortgage interest payments and real estate taxes in the first place. Therefore, part of the condition for just being able to "drop of the keys" and [ending the lease] should be the assignment of their tax benefits to the landlord (everyone in our economy that is hurt by this behavior).


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