Why I decided to walk awayby Tim Manni
If you’ve ever been curious to how a homeowner comes to that decision, you’ll want to read this story. HSH.com contributing writer and personal finance expert Lynnette Khalfani-Cox talked with one homeowner who agreed to share his story.
Here’s an excerpt from Lynnette’s article “Why I decided to walk away.”
Gene Kessler has owned four homes in his lifetime, and until recently had enjoyed homeownership for 45 years. But this month, Kessler, who is 67, became a statistic in America’s ongoing foreclosure saga.
“I bought this house at the top of the market seven years ago,” he says. “It was put up for a sheriff’s sale just last week.”
In Kessler’s case, however, he’s not bemoaning the loss of his three-bedroom home in New Ulm, Minn. Rather, Kessler is relieved that he’s no longer on the hook for a $1,250 a month mortgage on a home whose value has declined dramatically.
Keller is among the nation’s growing number of homeowners who are engaging in a strategic default. These homeowners–either by choice or by circumstance–stop paying their mortgages after making a calculated decision that continuing to pay is simply not in their best financial interest.
Like most homeowners, Kessler had run the numbers and asked himself questions like, “How much house can I afford?” before he forked over a $40,000 down payment on the 2,000-square-foot, brick home that cost him $164,900.
But with the sagging housing market, all that equity has dried up. Kessler’s home is now worth just $111,000–putting him severely underwater.
That’s why he began considering a strategic default…
Finish reading: “Why I decided to walk away“