Saturday, February 21, 2009

The Housing Market Crisis

We are some of those homeowners affected by the housing market crisis. I admit that we made some bad choices with regard to our loan, when and where we purchased a home, and other things, but some of it was simply due to ignorance. We did try to educate ourselves, but we didn't do a very good job of it. Now we are stuck with a home that has depreciated so much in value that it's barely worth more than 37% of the current mortgage on it. It makes sense just to walk away from it, but after researching all of this, I'm not sure that we should go that route.

My husband thinks we should. He wants to move out-of-state, and given the fact that we can't sell our house without owing a lot of money still (on a house we no longer own that has very little value), that we should just walk away when the time comes to move. But I think we should try some other things first and put moving off until it's absolutely necessary. If we have to foreclose, if we have to walk away because our options are so limited, then is the time to consider moving with the company to another state, or wherever. But until that happens, we should practice integrity by doing everything in our power to honor the contract we signed.

How do I convince him of this basic need of mine to have integrity? How do I convince him how badly the possibility of leaving our home, even though it's a home I'm not sure I even like all that much, hurts me? I have researched and researched the ramifications of either choice, and it may be that in the near future, even after trying all we can to keep this house, we still might need to leave it, but I don't think that should be our first choice, nor should it be a choice at all, but a necessity, if it happens.

We are clearly upside-down in our mortgage. Our ARM resets in July, probably making it impossible to pay. Right now, we are not behind in payments, and we have even had help to keep it that way. Right now, we have other debts, but they are not as overwhelming as they were a year ago, and we are slowly chipping away at them. There are some structural issues with our home that we might need to have looked at before the time comes to sell, if we can hold out that long. But if we are going to just walk away, I don't want to use money on hiring a professional to evaluate the home. It's possible that these issues are minor and won't require a huge repair bill. The other side of our situation is that my husband's work is moving into Utah. He wants to go when they open their Utah store this summer. He wants to be part of that. I think that's wonderful that he does, but with our house situation and not being able to sell, we might not be able to be part of that. Which is bigger, trying to maintain our integrity with the mortgage and keep this house until we really can sell it, or trying to move with the company, possibly opening up the rate of promotion to happen more quickly for my husband?

Can you weigh in with your thoughts and opinions? What might you do in a similar situation. If you want more detail, feel free to ask.


9 comments:

swedemom said...

That is so hard. If it were me, I would try to do everything to honor my agreement, because walking away seems and feels dishonest.

Maren n' Mark said...

Well, you already know my personal experience with this one, but sometimes if you can take the emotional asspect of being a homeowner and a possible failure out of the equation, then it might make things clearer. Will my family still be together? Will they be healthy? Will my husband still have a job to support the family? And realize it is just a piece of property and there are more important things in life then a house. The stress that comes with this type of problem doesn't help the important aspects of life. It doesn't make things any easier, but sometimes being able to see beyond the present is helpful.

swedemom said...

One additional comment. Employers often check credit scores of potential employees. Having such a ding on your record could affect future employment. It is possible that you won't stay with in'n' out for the duration of your husband's career. Employers today don't necessarily reward those who stay for the long haul.
As far as I understand it, the church counsels its members to honor their obligations.

Devin & Ruthann said...

I have some information about the subject, but I'll have to explain it to you in person...

Jen said...

Jenna- i was going to comment last night but it was too late. i don't think your integrity is at stake at all in this. we didn't have to go thru a foreclosure, but if that was our route i wouldn't feel dishonest about it given we were trying to make the best decision for our family. it's definitely a big hurdle, but u guys will make it over. heck- wasn't the prez speaking tonite on possible help with this crisis? call me anytime we can chat :)

Jen said...

jk on the last part, but not about calling me obviously. {Jason wanted to respond as well..so here is his thoughts. "You need to ask your self 2 questions." Are you selfishly walking away because you can afford it but you don't want to deal with negative equity"..like investors did. Or can you genuinely not afford it. You have to make the decision that is in the best interest of your family. don't forget to pray..

mamachick said...

Thanks for all your comments. We are going to try and hold on, possibly with some sort of refinance/renegotiation we hope. If the bank won't budge, then we'll have no choice. I'd rather foreclose by force than by choice, if that makes sense.

And I wasn't saying that people who have to foreclose are not honoring their agreement because many are in that situation not by choice. I was talking about CHOOSING to walk away, just because we want to move somewhere else and selling isn't really doable. We just need to put thoughts of Utah on the back burner and wait and see what happens.

swedemom said...

Jenna, I think the choice makes all the difference. If you have no choice, then walking away is a completely different matter.

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