Analyst: 5 to 6 million could “walk away” from homes

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The New York Times tonight covers a story familiar to readers here: increasing numbers of homeowners are choosing to walk away from their mortgages and their houses.

The Wall Street Journal also tackles the story tonight, under the headline ‘Borrowers Abandon Mortgages as Prices Drop.’

Behind the trend: If you didn’t put much of your own money down when you bought the house, it’s a lot easier to walk away. And a large number of recent buyers put very little down.

From the NYTimes: “Will everyone walk out?” asked Christian Menegatti, a real estate analys. “No. But there’s been a cultural shift. Buying a house used to be like entering a marriage, a commitment for life. Now, if you see something better, you go back into the dating market.”

When homeowners see houses identical to their own selling for much less than they owe, Mr. Menegatti said, “I wouldn’t be surprised to see five or six million homeowners walk away.’

Bloviation: You may feel you’ve read this story before, but the NYTimes account goes well beyond the anecdotal and explores the cultural and financial changes driving this trend. It’s well-reported and worth reading.

Your thoughts? Comments? Email story tips to peter.viles@latimes.com
Photo Credit: LATimes
Hat tip: PJ via email.