Underwater borrowers, and what to do about it
If you're underwater, you probably can't refinance without bringing cash -- potentially a lot of it -- to the table. And you might be paying a lot more for your mortgage than it would cost to rent something similar, one of the reasons some Americans are walking away and letting their bank foreclose.
Some of you folks took two polls here this week on topics related to that trend: Would it be a good idea for the government to help underwater borrowers refinance into lower rates? And is it acceptable or not for people to walk away from their mortgages?
The government-help proposal comes from financial publisher HSH Associates. If a home is worth $150,000 but the mortgage balance is $180,000, for instance, refinancing into a $150,000 mortgage would create a $30,000 "value gap." HSH suggests that Uncle Sam promise to cover any loss the lender would see if the homeowners end up selling before rising values or payments have made up that gap.
Two-thirds of readers who took the poll gave the idea a thumbs up. Most said it would help them refinance. The rest of the supporters said they wouldn't need it personally but think it would help others and/or the housing market.
Of those who said no thanks, most are against it because they're tired of government bailouts. "No" wasn't strong enough for one voter:
Also this week, I noted that the Pew Research Center polled Americans about whether it's acceptable to walk away from a mortgage. So I put the same question to you.
As a group, you're a lot more sympathetic to walking than the U.S. as a whole.
The "yes" and "no" votes were equally split at 30 percent each. The most popular answer? "It depends on the situation," with 38 percent.
That's two-thirds saying it's OK at least in some cases, compared with just over one third of Americans who said the same in the Pew poll.
A few folks who took the Wonk survey wrote in their own answers:
"Not only is it acceptable, in many cases it is recommended."
"Yes, and we plan to do it."
"NEVER -- YOU bought it YOU PAY for it."Definitely a heated subject.