Why Not Having a House is a Good Thing

Today I listened to a couple of stories on NPR about people who want to, but just cannot move. They can’t move because they are underwater on their mortgage and they can’t afford to sell their home. This isn’t a rare phenomenon these days – on their website NPR has a map showing the percent of homeowners who have negative equity in their homes and nationwide 23 percent of homeowners owe more than the current worth of their home. Ouch. What do you do when there is no way to sell your home and pay off the mortgage in the process? The story profiled two particularly painful cases – an estranged couple who bought a home together three years ago and who now live with each other even though they no longer plan to get married, and a family separated by over 900 miles – the wife staying with the home they can’t afford to sell and the husband living in an RV and working at a job in another state.

In another story NPR profiled job hunters who are anchored to their homes. Unable to sell their homes and cover their outstanding mortgage they turn down jobs that require a move, or limit their job search to the area close to home. This hurts the efficiency of the job market – restricting not just the job searcher but employers.

These pressures – the desire or very real need to move and the opposing constraint of not being able to sell the house for a sufficient amount of money have some people walking away from their mortgages despite the negative consequences. If you give up, stop paying the mortgage and move to join your husband who is working in another state, or take an out of state job when there are no jobs locally, and your house goes into foreclosure you walk away with an albatross of credit damage and potential tax liability. There are reams of articles warning against this step, most with titles that contain words like danger, damage, fatal to alert you to the seriousness of this step.

And for homeowners who are still employed there are some options in new programs that have been started in response to the record number of foreclosures. These programs can help homeowners to refinance or reduce the principal or allow short sales. I tried a short sale program when our house went into foreclosure but buyer after buyer failed to secure a loan and in the end the bank took and sold the home. The price it bought was less than I paid for it – but not less than I owed having sunk my entire savings (including cashed out retirement plans) into the down payment. While we ended up losing everything at least we didn’t owe anything when all was said and done and the dust had settled.

And now, I can actually feel a little relieved that we don’t own a house. Yes, I still feel a reluctance to look at pictures of our house – a 2-story, 5-bedroom home with finished basement and new bamboo floors that I had installed. I imagined living in that house until the children moved out to go to college. But my mom was a big proponent of the ‘no point crying over spilt milk, pick up and move on’ philosophy and led by example in dealing with her own crises. So I’ve also moved on – reality has a way of getting in your face after all. And certainly there’s no way I could afford the mortgage, property taxes and utility bills associated with a house without a job. Now if we decide in the next year that we need to move – possibly to join family members in the Midwest, or more optimistically for a new job – it will be easy to do! We aren’t anchored. Our home has wheels!

This entry was posted in homelessness, RV Living, underwater mortgage and tagged , . Bookmark the permalink.

3 Responses to Why Not Having a House is a Good Thing

  1. SMS says:

    Wishing you a stress free community . I think your kids will be feeling like they have more “Space” to stretch out because they feel welcome. They don’t have to hide and be quiet, because they are not wanted.
    Let’s hear about the party and new friends.
    Did the kids have to change schools? Do they have needs your community resources/blog followers can help with or are you set for the start of the school year?

  2. Rosa says:

    This is what happened to my parents, back in the early ’80s – my dad lost his job, and we had to move, but they couldn’t sell the house where we were. So my dad took me and we lived in an apartment in the new city, and my mom stayed home with my little brother, showing the house and trying to sell it. For a year.

  3. Debbieo says:

    I do so enjoy your writing. You are very articulate. Your post was pretty much about one of the reasons we are selling our house. We wanted to sell it while we could still afford it and could get the money back we had in it. I am sorry it didnt work that way for you.
    My husband talked to one of the head hunters today and told him we would be closing on our house in about two weeks and then would be free to move to a new area.
    Like you, we wont be tied down and will be able to easily relocate. It is coming together for us now.
    Stop by my blog and see what we are up to right now.
    So tell us about the party at the new rv spot.

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