Houses are left behind to pay car, credit bills

[LaStrega]

Houses are left behind to pay car, credit bills

Sandra and Thomas Floyd figured they'd live in the north Minneapolis home they've owned for 23 years until the day they died. But now they're joining the ranks of homeowners across the country who are keeping their credit cards and the keys to their car, but letting the house go.

"Who wants to pay the mortgage company and still have nothing to show for it?" said Thomas Floyd, whose loan now far outweighs the value of his house.

Foreclosure used to be considered a last resort. Fearful of the financial and social stain that came with losing a house, homeowners did whatever they could to make payments.

But falling home values combined with costly subprime loans are forcing an increasing number of cash-strapped homeowners to question their priorities. Scrape together monthly payments on a house that's now worth less than the mortgage, or skip that payment but remain current on credit card debt and other bills and try to start anew?

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1. I don't understand this. They have lived in the house for 23 years - isn't it almost

all paid off? I don't understand why they can't stay put. The article says that this couple wanted to stay in this house, but can't. Who cares what equity is in a house if you just want to stay put anyway? I'm just trying to understand. Also, fixed mortgage rates are still pretty low - why is it so hard for people to move from an arm to a fixed? I do understand the problems that come up if one is laid off, has huge medical bills, or some other major change in their finances. But why are so many people in relatively ordinary circumstances (not laid off, no huge medical bills) having such big problems with their mortgage? Not flaming, just trying to understand this. Is it the costs of everything else (food, utilities, gas, etc.) that is forcing them out of their homes?

[Love Bug]

2. I don't get it, either

Their mortgage payment has to far less than they would be paying for rent somewhere. The only thing I can think of is they refinanced and took out a ton of equity and are are now stuck with a huge mortgage.

[Randomthought]

3. read page 2

It explains what happen to them. Some of it was bad luck and some was bad judgment.
The house next door to us in SW Minneapolis has been foreclosed on. The amount owed is almost $100,000 more than the house was ever worth. I have no idea why the lender loaned the owner the money to start with.

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4. It's astounding that they could go from having only $59K debt in 1999 on their house

(almost 10 yrs ago) to now when they have a mortgage payment of $1770/month. Wow. Yes, bad luck in losing her job, bad judgment in falling for the scam, and evidently for renovating a house they couldn't afford to renovate, and big credit card bills. I guess the take-home message is there are too many refinancings going on out there.