Walkaway Homeowners: Fact or Fiction?

U.S. lenders claim people who owe more on their homes than they're worth are simply abandoning them, "walking away" from high mortgage payments.

Bankers say the trend is frightening because homeowners in the past have gone to great lengths to avoid foreclosure.

But the Los Angeles Times reports few banks or real estate trade groups have been able to produce hard figures about the phenomenon. Marianne Sullivan, senior vice president at Fannie Mae, said she hears more stories about walkaways but still called them "folklore."

Bruce Marks of Neighborhood Assistance Corp., a Boston group that helps homeowners, said that to the extent there are walkaways lenders should take the blame.

"Who do you see walking? They're people whose rate is about to reset and they see no way out," Marks said. "People who have a fixed-rate mortgage that was initially affordable and continues to be affordable don't walk away from their home, even when it's underwater."

Stuart Gabriel, a real estate expert at UCLA, said some of the apparent walkaways are likely to be people who bought houses as speculation and lied on mortgage applications, saying they would live in them.

What is your take on this? Do you know of anyone personally who has taken the "walk away" attitude with their home? Use the "comment" link below to tell us about it. Don't worry, your privacy is protected, no email addresses EVER get published from our reader comments.

Housing Starts Up 8.2%

Construction of new homes posted the biggest increase in more than two years in April and applications for new building permits turned up for the first time in five months, a rare bit of good news in what has been the worst downturn in housing in more than two decades.

The Commerce Department reported recently that housing construction rose 8.2% in April to a seasonally adjusted annual rate of 1.03 million units. A big jump in apartment construction offset further weakness in single-family homes. The gain represents a recovery after a steep slump in March building that had pushed activity to the slowest pace in 17 years.

The surprising rebound in April may be temporary, given the headwinds builders are confronting at the present — from slumping sales to soaring home foreclosures.

Even with the improvement, housing construction nationwide was 30.6% below the level of activity a year ago. The National Association of Home Builders reports that its monthly survey of builder sentiment edged down in May to a reading of 19, just above the all-time low of 18 set in December. The survey had held steady at the low level of 20 from February through April.

Mortgages with Bad Credit History

As home loan guidelines get stiffer and stiffer, more and more people are finding bad credit mortgages as plan A, not plan B as it used to be. But just because you're in the market for a bad credit mortgage loan doesn't mean you shouldn't still look for the best deal possible.

It's best to explore various options when it comes to finding a good rate as these will differ from lender to lender. If you are one with bad credit and looking for a bad credit mortgage loan, know that your rates may depend on your circumstances. This means your flexibility with the mortgage lenders should be at an optimum level. Interest rates may vary according to the circumstances, location, and severity of your bad credit history. Interest rates on bad credit mortgages are likely to be significantly lower than the rates on your existing unsecured debts such as credit cards and personal loans. So this is actually more advantageous than letting such personal debt eat you up.

If you are seeking a bad credit mortgage loan your quest for redemption should start with those mortgage lenders who are more likely to help you. Ideally these lenders should have bad credit mortgage loans within the top tier of their mortgage products. These lenders are happy to help you with a second or third chance. They'll work with you on things such as rate and mortgage insurance.

Above all, do your research. Talk to several lenders. Don't just take one lender's decision as being the only way for you.

Roswell GA Real Estate Investing: The Time May be Right

Listen to all the bad news reports. It's the worst time since the Great Depression to buy real estate, right?

Not so, according to some individual investors, who think the market slump has made selected areas more desirable than they've been in years.

While many buyers, whether potential residents or investors, are staying on the sidelines, largely from fear that prices will continue to plummet, some private investors think there's no time like the present to take advantage of a market in freefall.

Overall, homes sales have plunged to record lows. However, the percentage of investors in the market is edging up, according to DataQuick Information Systems, a real estate information service.

Real estate investors should not expect a return to the no-money-down days, which means they already have cash on the line as soon as they buy. But remember what Warren Buffett says, "the fact that a market is not turning around in the next year isn't significant. If you wait long enough, the market has always gone up since the days of the caveman."

What do you think? Is now the right time to invest in real estate? We'd love to get your opinion on that. Go ahead and click the "comment" link below and sound off.

Taxes: Your Odds for an Audit

If you've already filed your taxes this year, and are now relaxing for another year, don't get too comfortable just yet. Seems the IRS is now auditing more taxes than ever, and the number is only expected to get larger in the future.

Being rich has some fairly obvious advantages. But there are also drawbacks. For example, this time of year when a big income may mean bigger odds of an audit.

Money Editor Stacy Johnson takes a look at your odds of an audit in this short video. (Clip runs 1:16)

Do you worry about an audit on your taxes? Do you use an accountant thinking that might save you from getting that dreaded audit letter? We'd love to hear your opinion on this. Use the comment link below to tell us what you think.