Reply to What I don't get: When people complain that they are drowning because their house is underwater

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Reply to "What I don't get: When people complain that they are drowning because their house is underwater"

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[quote=Anonymous]Because people look at underwater properties as a chunk of money they have lost.   Regardless whether you still have mtg on it or have managed to even pay it off, it is still money lost should you attempt to sell it.  You cannot get your money out of it unless you wait and this wait may take many years just to get what you paid for it.  Not any appreciation, not to keep up with inflation, just to get dollar to dollar what you put into it, you must wait years.  This is why people are upset.  don't see how it is so difficult to understand.  Mtg amount and whether you can afford it today has not much to do with it.  It's the feeling of loss of your hard earned dollars.

Some people are walking away from their underwater homes as they simply don't want to continue paying into the hole regardless whether they can afford their mtg or not, especially if they have put very little equity into the house.  They just want to cut their losses.  Others, like my friends in CA were able to negotiate a lower pmt with their bank on their home that's lost half of its value.  The bank have agreed to make an arrangement for some sort of refinancing to keep them in this house when they prepared to walk away from it. [/quote]

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