I live in Lee County, FL. We bought our house 3 years ago when this area was booming and paid $250k for it with a fixed rate, 30-yr VA loan. Now, our $250k house (3BR/2BA) is only worth $120K per the current appraisal and will likely drop a little more.
So, I'm paying a $250k mortgage payment on a house that is only worth $120k and no way in hell I could ever sell it to break even...I'd have to come up with almost $100k to just get rid of it. I went to discuss a refinance from our bank and they told me that there's nothing they could do because of the current market situation.
THAT is why you see a lot of people walking away from their homes. When you're that far flipped and see no light at the end of the tunnel a lot of people give up.
I have a great job, one of the few lucky ones still living down here, and we always pay our mortgage payment on time. Still, the lender won't even discuss any compromises based on the actual value now.
The Government, Dems/Reps, have nothing to do with the housing bubble popping. You can blame the lenders for giving people mortgages they couldn't afford...but since the Clinton Administration pressured lenders to give low income people and minorities loans I guess the Government is hold some of the blame?
If I knew it wouldn't DESTROY my credit for the next ten years I have to admit it would definitely be a thought to give it back. For me, though, it's just not worth the credit risk. So, I pay for something that's not worth the actual value.
Not just homes are like this...what are you driving?! Yea, they aren't usually worth what is owed, either.
Just my .02
