The latest form for this has taken a nasty twist with ethical questions about the practice of short sales.
People who bought at the peak of the market in 2005 and later have come to the conclusion they are more than a little upside down with equity and while they agreed to buy the property they see very little hope of ever getting even on the deal within the life of the mortgage or horrizon of their ownership. So they simply quit making payments to the bank and put the property on the market for a short sale with agreement to do so from the bank or mortgage holder.
We know of a home not far from us that sold for $170k in 2006, it just sold this week on a short sale for $79k. The sale goes down for less than $0.50 on the dollar. The owner who still makes a decent living figured out he was paying nearly $1500/month to own and make payments on the place. He can literally move to any house in his neighborhood for around $700/month or less as a renter. No property taxes, no maintenance, no mortgage, no insurance, no painting, no anything a homeowner has to pay for on a regular basis and living at the same standard for less than half the cost. What a sweet deal! Is this a great country or what?
This guy has done just what the banks have done. He put a stop loss order on his investment of owning a home. Is this ethical? Seems the bank is OK doing these deals. The glow of homeownership has lost its lustre and people are bailing out in droves. Your home has become an albatross and a tax drain for your pocketbook but a cash cow for schools, and government who can assess taxes to your abode to the point of pain and suffering.
You will notice in your recent assessment from the Assessor your property has taken a severe hit in value from previous years. Don't bet you taxes will be going down as all the taxing agencies are going to increase the levy rate to make up the difference this year plus take 3% more than they did last year. You will have to pay more property taxes than ever this year. Don't think for an instant because the value went down your taxes will be less. Won't happen so don't get your hopes up.
The latest in housing short sale/defaults scam is only going to get worse once more people figure out this escape route on how to get out from under HOME SWEET HOME and the ugly mortgage they all signed on the line to pay.
Anyone still think Real Estate is an Investment? It may be if you are now buying on a short sale and don't pay too much when you ink the deal.
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