Five years into the housing downturn, a larger number of homeowners with mortgages say they will walk away from their homes if their property values continue to drop, according to a new Housing Predictor opinion poll.
Almost half or 47% said they would walk away from their mortgages, while almost an equal number or 53% said they would not walk away. The divide among homeowners with mortgages shows a major increase from the same survey taken roughly a year and a half ago in October 2010.
The surveys show that there has been a consistent rise in the volume of mortgage holders surveyed who say they will walk away.
The polls show an alarming increase in the number of homeowners who say they will walk away. Some 32% said they would walk if housing prices kept falling when the same question was asked in March 2010. In October of the same year, the figure had risen to 36% of respondents.
The foreclosure crisis, falling home prices in the majority of the U.S. and lingering doubts over the value of homes increasing in most homeowners life times are contributing to the increase in mortgage holders who say they will walk away.
The hot topic has grown a flood of controversy over the question of whether it is moral or immoral to walk away from a mortgage. A home loan is usually a contract between a lender and the mortgage borrower similar to loans that businesses take out and some times fail to repay such as in cases of bankruptcy.
However, creative financial engineering on Wall Street and the introduction of all sorts of mortgages by banks and mortgage companies during the real estate bubble produced mortgages so that home loans could be bought by anyone who could sign their name.
The coercion between bankers and the corruption that developed in financial circles spawned the largest financial crisis the U.S. has experienced in history and an all-time record number of foreclosures, which are forecast to increase in 2012 and last for many years.
The value of homes in many regions of the country may be threatened from ever reaching their all-time record values as a result, producing anger among homeowners and spawning the Occupy Wall Street movement.