Is Foreclosure No Longer a Social Disease?

February 2, 2010 | By Kelley Koehler | Filed Under Tucson Foreclosures and Short Sales

I showed a house last week, a foreclosure, that had been completely taken apart. The picture here is of the kitchen. Or what used to be the kitchen, anyway. No cabinets, no countertops. They even took the backsplash. The appliances. Door handles. The banister on the stairs. And the entire heating and cooling system.

Which is a shame. And potentially a criminal act, I’m told.

However, I’m seeing fewer of these homes. A year or two ago, you could see a couple of these houses in a day without even trying. And even this home, while stripped of just about everything of value (I’m a little surprised the interior doors were still in place), there wasn’t damage, other than removed items. There weren’t holes kicked in the walls, or paint dumped on carpets, walls tagged with filth.

I used to see a lot of anger and frustration taken out on the foreclosed home. And I see less of that now.

In that week, I happened to have this same conversation 3 times with 3 different people. Has the prospect of foreclosure become socially acceptable? If it is okay to talk to our friends and family about our housing woes without perceived judgement, does that make us less likely to trash the place as we leave it? To have an outlet for our anger and frustration, other than the house itself?

And then there’s the walking-away-and-proud movement – comments on that post are varied, but there are strong arguments on both sides. Certainly for most of us, our home is our largest investment – but I can tell you through experience that people select the home they purchase based on an emotional choice.

What do you think? Is there less social stigma to walking away? And if so, what about the impact to your credit and the ability to purchase again? If you were faced with foreclosure, what would you do? Are you underwater and thinking about walking? I’d love to hear your thoughts in the comments below.

Comments

3 Responses to “Is Foreclosure No Longer a Social Disease?”

Jim Ludes on February 4th, 2010 11:13 am

I think there IS less social stigma to walking away. I think it’s like anything you see a lot of, though. Used to be divorce was a major no-no. Now, do even HALF of marraiges last? At a point, it becomes, maybe not socially acceptable, but socially tolerable. If you are the only guy (or gal) that you know that is losing or has lost a house….there was a level of shame in that. But now, it seems everyone knows someone who has….and there’s a pretty good chance that someone within a couple block radius of you has had the same happen to them.
Scott Stephenson on February 4th, 2010 6:09 pm

Confusing ethics and finance is a terminal disease. Walking away is a simple financial decision, and anyone who confuses that decision with personal ethics, or morals, or social responsibility is nothing more than easy meat for the voracious financial carnivores.

I read an article this week that made the point that the stigma of foreclosure is rapidly melting away. It’s like speeding on an interstate – you really stick out if you’re the only one doing it. But if everyone is doing 85, you just melt into the crowd.
Lisa Corkill on February 4th, 2010 7:33 pm

I don’t think that it is socially acceptable, but I believe that with the economic situation for many, people are more likely to have some empathy for those who find themselves in a situation where they don’t feel they have any other choice than to foreclose. Even those who have excellent credit and/or substantial equity are finding it hard to refinance.
Even though I have a job, and over $100,000 in equity (even with the down market and having a low appraisal due to foreclosures), it took 7 months to close my refinance (today). Due to rising costs in everything, I felt I had to refinance or sell, and I felt I was in a position to accept either, but I understand that people can’t afford to jump through hoops forever, especially with rising costs and they are upside-down on their home. What’s the point?
I have a friend who has been in her home for almost 20 years. She pays almost 7%; she wanted to take advantage of the low interest rates (under 5%), because she has kids in college etc. She waited four months to refinance and finally said forget it. The big problem is that the underwriters are not local, it switches hands many times, and what is required changes DAILY. The problem with my friend’s loan was that the laws somewhere else were different here in AZ, therefore, the underwriter wanted my friend to do something that “saved the underwriter’s ass”.
Hence, the empathy. If hardworking people are getting the run around with their loans and can’t get straight answers from people face to face, the whole idea of, “well, they should have known and managed better” gets thrown out the window.

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