More Americans Walk Away from Their Mortgages

Crystal G., 42, figured it was time to move when groups of college students started renting in her condominium complex in Cincinnati, Ohio. She’d bought her apartment in 2005 for $98,000 and had been faithfully paying down a 15-year mortgage. But when the real estate market collapsed and neighbors started suffering foreclosures, her unit’s value plummeted to about $30,000.

As the complex started feeling more like Animal House than home, she approached her bank about refinancing into a 30-year loan so that she could afford to move elsewhere and rent out her condo. But the bank told her it wouldn’t refinance an upside-down mortgage. So she’s planning to stop paying — she heard that missing a payment would encourage the bank to renegotiate her loan.

If it doesn’t, she’s planning to walk away from the mortgage and let the home fall into foreclosure. But she’ll stay in the apartment and save the extra money that would’ve gone toward her mortgage.

Read more at http://www.thefiscaltimes.com/Articles/2012/10/24/More-Americans-Walk-Away-from-Their-Mortgages.aspx#A1HZBVYWCFZ062c7.99

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