Imagine, if you will, that Joe and Mary have just bought a house but have to take out a mortgage from the bank to pay for it. They have $50,000 as a down payment on a $400,000 home and the mortgage is $350,000. When they go in to sign the papers and find out what their monthly payments will be, the bank informs them that they will actually be paying for $450,000 mortgage. Joe and Mary look at each other and say,"I don't think so!" and they promptly walk out.Right now there are 10's of thousands of homeowners across North America whose mortgages are coming up for renewal. They will be renewing a mortgage that is more than what their home is worth, just like Joe and Mary were asked to do. When the value of a home is worth less than the mortgage, it is called 'under water'. And like Joe and Mary, they will say, "I don't think so." And they will walk away.
2 comments:
I love this pic... I could just see myself walking down that trail, surrounded by the lovely trees.
Too many people here did NOT just walk away from it, and lots of them lost out because they couldn't afford the mortgage payments. Seems the "American dream" of owning a home is slowly fading.
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