Walking Away From Your Home Carries Risk

When home values fall, a home owner might start to think about walking away from a home.

The scenario goes something like this: It's 2005. Dick and Jane have not saved any money for a down payment, but because market conditions are hot, and all their friends are using 100% financing, they decide to leap into home ownership. They find the perfect home to buy for $300,000. The back yard might be a sea of sand, but that's OK, they can get by without landscaping for a while.

Several years ago by. Dick and Jane still haven't put in a lawn. So, they go to the bank to get a home equity loan to help pay for the landscaping. The bank appraises their home and declines the loan because the home is now worth $200,000. Well, that's no surprise, says, Jane, after all, bank-owned signs are popping up like dandelions in their neighbor's yards.

To heck with owning a home, Dick and Jane say. Let's give the this worthless piece of crap to the bank. They figure: What's the worst that can happen? Plenty . . . read more about Walking Away From a Home.

More Articles by Elizabeth Weintraub, click below:

• Beware of Foreclosure Rescue Scams
  
• Ways to Stop Foreclosure
  
• How Foreclosures Work

_{©Big Stock Photo}

Technorati tag: walking away from home