KANSAS CITY -
One-fourth of all homeowners now owe more than their house is worth. That's 11 million Americans that are upside-down on their home loan. For many, the solution is simply to walk away.
What was once a stigma is now a growing trend. It's kind of like a backwards foreclosure, because of instead of the bank kicking you out, folks stick it to the bank. They declare bankruptcy, leave the house with the bank and make it their problem.
69-year-old Harry Crisson walked away from his Hyde Park home last month.
"I really didn't want to do it, but there wasn't any options," Crisson said.
Crisson's problems began in 2003 when everybody was refinancing their homes just before the market went into a free-fall. Now he owes a $140,000 on a house that the county values at $80,000.
The retired teacher was struggling to make his payments and the bank refused to modify his loan because he wasn't in default.
"It was sucking my portfolio dry," Crisson said. "It was sucking my retirement, it was sucking all my savings. Finally I said, 'I'm through, you take the house, I'm going to declare bankruptcy and I don't care about the stigma.' I'm just tired, I'm fed up."
Crisson's credit score may be shot but at least he still has money in the bank. Because of bankruptcy protection, the banks can't come after him for what he still owes.
"It's time for the individuals to do what is best for them in their situation and sometimes that means they need to walk away from the loan that they've gotten themselves into," said bankruptcy attorney Brad McCormack of the Sader Law Firm.
Crisson's bankruptcy attorney says often it doesn't make sense to keep paying on a loan that's more than the house is worth and he ads those who feel guilty for walking away, shouldn't.
"Banks are not looking out for you, banks are looking out for themselves at that point in time," McCormack said.
Crisson's gone from an 8-bedroom house to a one-bedroom apartment, but his finances are safe.
"I didn't want to leave a legacy of having to live in a cardboard box under a bridge somewhere," Crisson said. "I wanted to pull out while I still had something to pull."
If you don't file bankruptcy protection, banks can certainly sue homeowners who walk away. Experts say the biggest mistake homeowners make is waiting to long to seek legal advice.
Get in on the discussion. Let us know what you think about this story in the comments, and we might feature your comments on-air.
What was once a stigma is now a growing trend. It's kind of like a backwards foreclosure, because of instead of the bank kicking you out, folks stick it to the bank. They declare bankruptcy, leave the house with the bank and make it their problem.
69-year-old Harry Crisson walked away from his Hyde Park home last month.
"I really didn't want to do it, but there wasn't any options," Crisson said.
Crisson's problems began in 2003 when everybody was refinancing their homes just before the market went into a free-fall. Now he owes a $140,000 on a house that the county values at $80,000.
The retired teacher was struggling to make his payments and the bank refused to modify his loan because he wasn't in default.
"It was sucking my portfolio dry," Crisson said. "It was sucking my retirement, it was sucking all my savings. Finally I said, 'I'm through, you take the house, I'm going to declare bankruptcy and I don't care about the stigma.' I'm just tired, I'm fed up."
Crisson's credit score may be shot but at least he still has money in the bank. Because of bankruptcy protection, the banks can't come after him for what he still owes.
"It's time for the individuals to do what is best for them in their situation and sometimes that means they need to walk away from the loan that they've gotten themselves into," said bankruptcy attorney Brad McCormack of the Sader Law Firm.
Crisson's bankruptcy attorney says often it doesn't make sense to keep paying on a loan that's more than the house is worth and he ads those who feel guilty for walking away, shouldn't.
"Banks are not looking out for you, banks are looking out for themselves at that point in time," McCormack said.
Crisson's gone from an 8-bedroom house to a one-bedroom apartment, but his finances are safe.
"I didn't want to leave a legacy of having to live in a cardboard box under a bridge somewhere," Crisson said. "I wanted to pull out while I still had something to pull."
If you don't file bankruptcy protection, banks can certainly sue homeowners who walk away. Experts say the biggest mistake homeowners make is waiting to long to seek legal advice.
Get in on the discussion. Let us know what you think about this story in the comments, and we might feature your comments on-air.
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