Last week I wrote about the consumer equivalent of dissociative personality disorder, how I’m seeing sane buyers and sellers, traumatized by the gyrations of the recent real estate market, split into multiple personalities.
On reflection, I think that column was more than a bit autobiographical. I feel split, too — between the in-the-trenches personal details of my clients’ individual situations and transactions and the flyover view of consumer questions I receive in my columnist/writer work. Half the time, I see what clients want and need from the very narrow viewpoint of my buyers and homeowners, my area, and so forth. But that view zooms out to a national perspective, and includes buyers, sellers, etc., when I look at reader e-mails.
But these days, my two personalities have been reunited in a common theme: the walkaway.
And what a touchy subject it is. Occasionally, I get irate e-mails from homeowners raging about how their neighbors who have walked away from their homes have damaged their own home’s values. More often, I get notes from distressed homeowners who would already have walked away, but for the fear of some even-worse consequence — asking me what the ramifications and consequences of walking away actually are. And, in fact, to the extent that my zoomed-out viewpoint keeps an immediate pulse on what buyers and sellers and homeowners are thinking, I can vouch that interest in the walkaway is at an all-time high.
Why now? Just when it seems like the market is recovering? Here’s this — I got a bunch of walkaway inquiries right around New Year’s Day. And boy oh boy, did I get the unanimous sense that 2009 was tough — pretty much everywhere. A lot of the walkaway investigators related tales of long, arduous and fruitless loan modification discussion with their lenders.
The consensus? They’re over it. Exhausted of the suspense of not knowing whether they’d be able to keep their homes for the long term, even people who had lived in their homes without making a mortgage payment for as much as a year expressed a readiness and willingness to chuck it all and walk away — the sooner they could get closure, one way or the other, the better. …CONTINUED
The other trending topic from 2009 that I noticed contributing significantly to all the walkaway questions was totally unrelated to real estate: all the deaths among young (and young-ish) celebs in 2009. Lots of people came to terms with their own mortality and the brevity of life last year, and many of the folks who wrote to ask about consequences of walking away mentioned that they are struggling mightily to reconcile spending 60-plus percent of their incomes to keep houses that are hundreds of thousands of dollars underwater, and many specifically mentioned their inability to send their kids to college or otherwise do the things they want and need to do in this life, because of their mortgage obligations (and what they perceive as their lenders’ unwillingness to help out, either via modifying their loan or being more proactive in closing their neighbors’ short sales).
With the New Year, many people made financial resolutions about getting back to even, getting back above water and getting a handle on their bills. Others made resolutions about enjoying the precious moments of their lives and having fulfilling life experiences they can savor, cherish and cross off their bucket lists. Both of these types of resolution-makers seem to have honed in on walking away from their homes as one possible method of realizing their aims.
The only thing simple about walking away is that it’s the opposite of simple. Not one question-asker that has written me to get input on walking away wrote in a tone of devil-may-care frivolity. Many of them are in agony at contemplating the finality of giving up the home they love or giving up a lifetime of otherwise flawless credit history.
Others struggle with the simple ethics of it: They have never committed a deadbeat act in life, they committed to the loan, and they are torn apart at the thought of walking away from the obligation they have made. But they feel torn — should they literally mortgage the rest of their lives (and for a number, their children’s ability to obtain a higher education) because of a poor mortgage decision and/or a poor turn taken by the market?
So it turns out that their minds are split, too. And I’ll be writing a lot coming up about the ramifications and consequences of walking away from your home — pro and con — financially, psychologically and otherwise. The day when I (or any other thoughtful, reality-checked individual) could just proclaim absolutely, with no conditions — no! don’t do it! — are long gone. The mortgage market, the loan mod debacle, the job market — each of these layers of complexity is so complex in itself, that the decision matrix on this one is anything but clear. And that’s about the only thing I can say single-mindedly.
Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.
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