Real Estate News
Debt-laden homeowners paying credit cards before mortgage
September 30, 2007
Conventional wisdom has it that people will do everything to keep their homes. Not anymore.
The proliferation of no-money-down home loans over the past few years, coupled with the current housing downturn, is giving rise to a new mentality: People will risk losing their homes while doing everything to keep their credit cards.
”This is the biggest surprise we’re seeing,” said Elizabeth Schomburg, senior vice president of the Family Credit Counseling Service in Chicago. ”People are actually coming to us with situations where they are current on their credit cards but are in foreclosure.”
Smart choice on the part of consumers now that credit card debt can’t be discharge in bankruptcy. But you can walk away from your mortgage.
This is fascinating to watch. Does it mean that mortgages have suddenly become more risky than credit cards, and thus should command higher interest rates?
Where are the wonderful risk management/underwriting systems that the lenders developed?
I don’t see people eating ramen noodles while making their mortgage payments (like the bulls predicted).
If someone is underwater in a house they’ve been in only a year or so, with no money down, it would be foolish to try and keep it. They have literally nothing invested in it.
If someone is underwater in a house they’ve been in only a year or so, with no money down, it would be foolish to try and keep it. They have literally nothing invested in it.
If someone is underwater in a house they’ve been in only a year or so, with no money down, it would be foolish to try and keep it. They have literally nothing invested in it.
If someone is underwater in a house they’ve been in only a year or so, with no money down, it would be foolish to try and keep it. They have literally nothing invested in it.
If someone is underwater in a house they’ve been in only a year or so, with no money down, it would be foolish to try and keep it. They have literally nothing invested in it.
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