'Under Water' Mortgages on the Rise

[SamIam]

Dumb question, but if folks have to re-locate to find a new job, what's to stop them from renting their home for the amount of the monthly mortgage payment? Whatever else may be going on, I haven't yet heard of people fleeing one area of the country for another a la "Grapes of Wrath". Even in my little rural part of the nation, rents seem to be humming along quite nicely. If your home is underwater, why can't you just hang on until prices re-align themselves as they always do?

[DanaC]

Originally Posted by SamIam

Dumb question, but if folks have to re-locate to find a new job, what's to stop them from renting their home for the amount of the monthly mortgage payment? Whatever else may be going on, I haven't yet heard of people fleeing one area of the country for another a la "Grapes of Wrath". Even in my little rural part of the nation, rents seem to be humming along quite nicely. If your home is underwater, why can't you just hang on until prices re-align themselves as they always do?

My bro rented his house out initially. The rent didn't cover the mortgage payments. Then the tenant let him down (as happens sometimes) and as he was operating so near to the edge, it tipped him over.

This is probably one of the reasons I am cynical about home ownership. I was 18 when Our Kid got married and bought a house with his new wife. By the time I was 21 they'd lost the house and were starting again in a rented place.

[sweetwater]

Originally Posted by SamIam

Dumb question, but if folks have to re-locate to find a new job, what's to stop them from renting their home for the amount of the monthly mortgage payment? Whatever else may be going on, I haven't yet heard of people fleeing one area of the country for another a la "Grapes of Wrath". Even in my little rural part of the nation, rents seem to be humming along quite nicely. If your home is underwater, why can't you just hang on until prices re-align themselves as they always do?

What stopped us from renting out our large condo with a view of Long Island Sound was me - and that was due to too many negative experiences with tenants. We moved out of state for a new job so we would have been out-of-state landlords. Nope. Not again. Ever. In our new location we could buy and rent out any house we could find that is available, but choices are few. Moving from a cold market to a hot one is not wise, but it's done now. Thank goodness!