More People Are Giving Up Their Houses

In Uncategorized on April 5, 2010 at 8:22 am

The latest bankruptcy statistics show new cases filed in March were at the highest level since the bankruptcy law changed in 2005. More people are choosing chapter 7 over chapter 13. That’s because fewer people are choosing to save their homes. That’s unfortunate because these abandoned homes add to the depressed real estate values.

Why are people giving up their homes? I see two factors at work: lower income and declining home equity. Many people struggle to keep up with basic expenses as their employers eliminate jobs, benefits and overtime. As foreclosure rates climb, housing values fall and equity is reduced. So more home owners are walking away from their homes rather than trying to save them.


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