To move or not to move; unemployed job seekers face tough choices with undervalued homes

[DimplesinMI]

Source: Examiner.com

Michigan’s unemployed job seekers face many challenges when seeking new employment opportunities. The states’ double digit 13.1 percent unemployment rate, high numbers of candidates applying for employment openings and credit challenges, are just some of the issues.

Unemployed job seekers wishing to move out the state and go where more employment opportunities are located, face the reality of selling a home in a market where real estate values are between 25-50 percent underwater, from the home purchase price.

Decreased Home Values are Impacting Ability to Sell the House for What They Would Be Worth

As many as one-third of homeowners owe more on their homes than what they are valued for in the current market. If the homeowner is willing sell the home at a decreased value, another challenge they face is finding credit approved buyers. Banks have tightened their credit standards, leaving buyers that want to purchase homes, without lending options.

Read more: http://www.examiner.com/job-search-in-detroit/to-move-or-not-to-move-unemployed-job-seekers-face-tough-choices-with-undervalued-homes

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This is one of the factors that is impacting the housing market right now. What say you?

[fl_dem]

1. I am facing this tough decision right now

My job is relocating me out of state, I have tried to no avail to find a job here that pays close to what I am making now. My choices are to sale, rent or walk away. I cannot in this market rent or sale to cover what I owe. I am so torn. I bought my home as a single mother 4 years ago with no financial help from anyone and now I am contemplating walking away. I think I am young enough to take the hit credit wise...I never thought I would be in this position.

[Dappleganger]

4. You need to make the same business decisions

as Wall Street: walk away from toxic assets.

The survival of your family is most important, you have to do what's best to provide for them. It isn't your fault and don't feel guilty! Banks felt no guilt sticking YOU the taxpayer with the bailout of their toxic assets. The BANK was standing with their hands out waiting for your help but when you need it most, they don't even want to take your calls.

:hug:

[fl_dem]

5. thanks dappleganger, you make a very good point..

I will use your words as my mantra when I start feelng bad about walking away. :hug:

[Demobrat]

8. Don't feel bad about walking away.

The bank ALREADY GOT PAID for your house - by us, the taxpayers. If you pay them again it will mean they got paid twice. They aren't out a nickle so there's no reason for you to feel guilty.

[Skittles]

18. don't even THINK about feeling bad

we are not the ones who caused this mess - remember that - you do what you need to do to survive

[pezDispenser]

6. 100% agree

Take the emotion out of the equation. Brent White, a law professor at the University of Arizona, can lay out a more eloquent argument than I can. Take a look as this.

Good luck with whatever decision you make.

[handmade34]

2. as one who has a house in MI

and can't get a job to pay for it... I know all too well the story.

[Dappleganger]

3. "Nearly half of Jacksonville homes underwater"

http://jacksonville.com/opinion/blog/401574/abel-harding/2010-08-26/nearly-half-jacksonville-homes-underwater

"Nearly half of the homes in Duval County have negative equity, according to a report released by CoreLogic, a consumer information services firm.

In all, 43.9 percent of homes in Jacksonville were underwater as of the end of the second quarter. An additional 5.1 percent were described as being in a "near negative" equity situation.

Nationally, roughly 11 million homes - or 23 percent - are in a negative situation, something that's further exacerbating the foreclosure situation.

"Negative equity continues to both drive foreclosures and impede the housing market recovery. With nearly 5 million borrowers currently in severe negative equity, defaults will remain at a high level for an extended period of time," said Mark Fleming, chief economist with CoreLogic."

[grace0418]

7. I have friends experiencing this right now. They can afford and always pay their

mortgage on time. However she lost her job over a year ago and he will lose his soon if he doesn't get a degree in his field. So he is going back to school to get that degree, but the two schools that offer it are several states away.

Right now they owe something like $80,000 on their mortgage. But their neighborhood is in such bad shape that homes are now selling for $14,000. Yep, cheaper than most cars. So if even if they are able to find a buyer, they'll owe the bank over $60,000. They can't rent their place out either because they won't make enough to cover the mortgage even if they could find someone trustworthy.

So they're totally caught between a rock and a hard place. They have to move so he can go to school but they can't rent out or sell their house. They talked to a lawyer and he pretty much told them their only option is to walk away. Even though they are completely in good standing and always pay their mortgage on time. They're screwed anyway.

[PassingFair]

13. So sad.

“ Reckless fools lost first because they deserved to lose, and careful, wise men lost later because a world-wide earthquake doesn’t ask for personal references." Edwin LeFevre, 1932


It pretty much sucks to live in Michigan right now.

We need Virg Bernero, STAT!

[lib2DaBone]

9. Heart-Felt Healing to all who are going thru this... it is not OUR fault...

Sadly.. when you try to get a new job.. the employer will check your credit and say, "Oh.. you have a foreclosure.. you must have done something wrong?"

Mr. Obama should call for a 5 year moratorium on foreclosures.. TODAY.. (not tomorrow).

The bankruptcy courts can't process these overload foreclosure ANYWAY.. so why not let the families stay in their homes? We need to protect our skilled workers and their families.

Mr. Obama.. PLEASE GET YOUR HEAD OUT OF YOUR ASS. Tell Rahm and Geithner and Larry Summers to Fuck-Off... do what you know is right and just... we beg you...

[Dappleganger]

10. Haha!

Now you're speaking my language!!

[Lightning Count]

11. The amount of money I can save in 5 years without a house payment will be huge. nt

[PassingFair]

14. You've gotta live somewhere....n/t

[Lightning Count]

16. Why wouldn't I live in my house for 5 years?

Then I'd try to sell.

[SteveM]

12. Fortunately, my house has been clear for 21 years. But how I did it...

was not pleasant. Facing declining income and a huge drop in rent receipts from 2 other houses I owned at the time (one in Florida), I was forced to take Chapter 7. Before I did, I offered to pay off the mortgage on my then-residence at a 33% discount, but the lender wouldn't buy it. They later sold it for 15,000 less than what I offered. I sold out everything, and bought a "new" house outright. This has crippled my savings, but I still have some left. I didn't like it, but like my lawyer said: "You can try to work things out, but a year from now, you will be thousands poorer and still sitting across from me." Just a few years after Chap. 7, I was getting (and still get) vast quantities of credit card offers. I took one through my credit union so I can book flights.

Pull the plug and keep your earning power.

[KansDem]

15. "Strategic default" favors the wealthy...

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

The Times looks at investment homes and second homes, too, and found that delinquency rates for million-dollar-plus properties are higher than those for less expensive places.

What’s frustrating for readers is the way the Times tries to explain this discrepancy.

The story notes a recent comment from a Freddie Mac official, who said that some people who walk away might have good reason to do so, but, in the process, they’re trashing their communities. Then it goes on to suggest some theories it can’t really support:

The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default.

It makes sense that investment and second homes don’t engender the same feelings of civic good and community that one finds in the place where someone actually lives. But does anything else help us get from the data to the deeper sociological meaning of it all?

One academic speculates that the rich “may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest.”

--more--
Columbia Journalism Review

[hugo_from_TN]

17. Interesting comment

One academic speculates that the rich “may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest.”

Translation - the rich didn't get that way by being stupid about finances.

[No Elephants]

21. "Favors wealthy" conclusion was NOT not supported. However, IF true, so what?

Freddie Mac claimed default favored the wealthy simply bc people paid for other things after defaulting. Hello, the mortgage WILL be the first thing you default on, not food, heat or utilities. I'm just hoping Freddie Mac isn't making claims like this to make more palatable a federal law requiring all home mortgages to be recourse (meaning you could be sued for any deficit if you walk away from your home and its mortgage). Hard to see why else Freddie would be making such claims based on no meaningful evidence. As usual, trying for class warfare between the poor and the somewhat less poor.

[OhioChick]

19. Ohio home sales drop 35 pct. from June to July

Posted: 08/25/2010

By: Associated Press
COLUMBUS - A trade group says home sales dropped in Ohio last month as the market slowed following the expiration of government tax credits for buyers.

The Ohio Association of Realtors says 7,840 new and existing homes sold across the state in July, down 35 percent from June.

Ohio's average sale price fell 7 percent to about $137,000.

Sales of existing homes nationwide fell 27 percent in July, and a report released Tuesday by the National Association of Realtors says that was the weakest showing in 15 years. The decline in July sales compared with June was worst in the Midwest, at 35 percent. Sales sank 30 percent in the Northeast.


http://www.newsnet5.com/dpp/money/ohio-home-sales-drop-35-pct-from-june-to-july

[quakerboy]

20. I say that Wyoming has 6.7% unemployment

And the Dakotas are at 3.6 and 4.4. The obvious answer is for a flood of democrats to move out, take over the jobs in these places. As well as drastically changing the makeup of the electoral politics in the US. It wouldn't take but a tithe out of NYC, California, or Michigan to change the future of our nation. Plus equalize out the jobs between some of the higher and lower unemployment areas.

as to homes, I hate that it is so, but if you are screwed anyway, you might as well walk away. I dont see hanging on to your home another year is going to get you over any hump, the way things are going.