While doing a comparative market analysis for a home owner the other day in southwest Boise, I noticed a house for sale that was the next door neighbor to where I used to live. It is now for sale by a lending institution, so it has been foreclosed on. Even though it saddened me, it did not really surprise me as the owner and I had a conversation about 9 months ago. In that conversation he indicated to me that he was planning to stop paying his mortgage because the value of his house was so far below what he owed. He was a gentleman likely in his sixties, and stated that he would be dead before the house regained the value back to what he owed. (He may have been close to accurate as he had taken out a 2nd mortgage and was deeply underwater, possibly one of the highest negative equity, as far as percentage, that I’ve heard.) So although he and his wife had been home owners for nearly 40 years, they would now give up their home and join the ranks of renters.
I believe that he was on a fixed income and he likely could have continued to pay his mortgage, but choose not to. What do you think? Was he justified in the decision that he made or do you believe he was wrong?
Regardless, he is certainly not alone in his situation or his chosen course of action, and I know for him it was not an easy decision to make.
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