Saturday, March 1, 2008

A Disturbing Sign of Housing and Credit Difficulties in the US

There is a service called You Walk Away now available in America which, for 1,000 USD, will help you set up a way to walk away from your mortgage, aka give up the house and let the bank foreclose. A growing number of people are doing this, as their mortgage rates go up as interests rise yet the value of their house declines, leaving them making payments on houses they can't afford which are worth less than what they owe.

The service promises to help you do this while avoiding calls from creditors, staying in your house without payments for eight months and removing the foreclosure from customers' credit record (I guess have to promise the eight-months-without-payments part in order to get people already in serious financial trouble to give them a thousand dollars). But the fact that such a service exists means that enough people are in a situation to considered walking away from their home and mortgage that You Walk Away thought that a business was viable. I'm sure it is, and all of the press coverage will only help.

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