1) One family lost $50,000 when they sold their house in Mexico to try to keep the house in SD. Big mistake. They should have kept the Mexico house and walked on the SD house. They would be way ahead.
2) The other family took equity out to start a business which failed. They moved into the sister’s house.
3) Another woman took equity money out to support her lifestyle put her daughter through college. She moved in with her daughter and her boyfriend. This woman is 60 yo, near retirement.
4) Another family took money out for a business that failed. I don’t count them yet, because they are in bankruptcy trying to “save” the house. Big mistake in my opinion. They still think that prices will go up again soon. They will walk probably in late 2009 when prices sink further.
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From Barron’s article. Notice the word “brazen”. And the permabulls said that people will eat Ramen everyday before letting their houses go.
A new phenomenon of widespread negative equity — homeowners owing more on their mortgage than the underlying property is worth — has wrought a sea change in borrower behavior. Borrowers, whether subprime or prime, financially stretched or flush with cash, are walking brazenly from their obligations in stunning numbers.
