Another disturbing new norm

"Now these houses are not mansions, but when they were built 30 years ago, they were considered somewhat upscale."

This is not a good news story. In fact, it is pretty darn sad. And for most of us, unexplainable. The other day my wife and daughter were going for a walk around the block (where we live, that is 2/3 of a mile). As they walked by a neighbor's house, there was a sign in the front yard. It was a for sale sign by a bank. The house was abandoned and was being foreclosed on.

Why is this such a news story? It happens all over the place. For this reason. We live out in the exurbs. All lots are 2 1/2 acres or greater. In our development, there are 20 houses. Keep in mind, just to walk around half of it is 2/3 of a mile. It is a big area. Anyhow, since we have lived here, three houses have gone into foreclosure. Two of them were trashed by the owners before they left. The fourth house was sold on a short sale for a boatload less than what was owed to the back. 

Now these houses are not mansions, but when they were built 30 years ago, they were considered somewhat upscale. So 20% of the houses in this one development either went into foreclosure or short sale. This tells me two things. First off, the economy still is sick and has a way to go to fully recover. The other thing it tells me is people are different these days than a few decades ago. To go into foreclosure and trash your house is something that is way beyond my comprehension. 

Here is the irony. Truthfully, in our current home as well as our first home, we never missed a payment. Nor were we ever late. That being said, I do know this. The bank does not want your house. They are not in the real estate business. If you get into financial trouble, the bank will work with you - if you are honest with them. If it becomes evident that you can no longer afford to live in your house, they will work with you on selling it. The last thing they want to do is foreclose on a borrower. It is a lose-lose issue for both sides. 

My point is simply this. If someone asked me to explain what has happened in this neighborhood, where 20% of the mortgages did not work out, I would be at a loss. I do know this - banks are not Satan, and they not do have endless deep pockets either. If enough people default on their mortgage, we will have 2008 all over again. And that is in nobody's best interest.