The first groups truly did leave their home, packing up family and belongings and moving in with relatives and friends, leaving behind empty shells of homes in their wake. It was rumored that in Detroit, 10% of homeowners stopped paying their mortgages in the prior month. In an unwinding clusterfuck, never seen before in this country - financial institutions losing liquidity, stock values plummeting, nest eggs evaporating, even credit unions folding - people began ignoring their obligations, but staying put in their homes. Even families that had the means to make payments stopped doing so, seeing it as a fools errand.This post puts a different approach/perspective.
I got an agreement of sale today from a realtor looking for a prequal on a shortsale , the buyer lives next door , he has a current mortgage for $800,000 on a home he purchase in 2005 with no money down , the home he has under contact is right across the street from his present home , the offer is for $500,000 and it looks like the bank will accept itExplanation (via Atrios):
The borrower plans to buy it as a primary , once he moves in , they will stop making payments on the $800,000 loan that they have with CW
He qualifies full doc and has a 770 FICO , he figues letting his credit tank is not a big deal when he is lowering his mortgage debt by $300,000 .
Someone owns a house with a mortgage they either can't afford or don't want to keep paying (maybe it's about to go up, or maybe they just don't want to keep paying it). They plan to buy the now much cheaper house across the street, and since they have good enough credit someone might be happy to lend them the money. After moving to the reduced rate home across the street, they plan to mail the keys of their old house to the bank.