Long Beach Real Estate-Downtown Long Beach Condos

HR 5830: The FHA Housing Stabilization and Homeowership Retention Act of 2008 , is designed to provide relief for homeowners in trouble by refinancing their loan to reflect lower housing valuations.  If the current lender ˜forgives 10% of the loan balance, it allows a homeowner to enter into an equity sharing type of arrangement for a refinanced loan.

I offered my analysis of and support for this bill, on BloodhoundBlog.  A discussion arose about a change on social mores, most often associated with younger, first time home buyers.  It seems that the compunction that comes with a mortgage default has disappeared.

My questions for discussion are:

1- If your property value has dropped below the amount owed on the home, are you inclined to walk away from the loan (s) ?

2- Does the prospect of not being able to obtain real estate financing for 4-7 years dissuade you from walking away from the loan.

3- Do you feel a moral obligation to pay back the full amount of the loan regardless of the value of the property?

4- What do you think will happen to loan guidelines if compunction towards loan default disappears?

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