You Walk Away

I'm looking at what is happening all around this nation in regards to falling home values and mortgage defaults, and it isn't pretty.

(To my wife, honey I know you're reading this, so don't freak out. I'm just trying to plan for worst case scenarios.)

Gottschalks, one of California's oldest departments stores, may be going under. The 3rd quarter netted them in excess of 10 Million Dollars in losses. They're seeking major cash infusions and a possible partnership with a Chinese company. Things don't look good on that front from what the news has said. If Gottschalks goes under it will be the second major retailer in California to fail, following close on the heels of Mervyn's.

Auto sales dropped 36% last month.

All over this country places are closing, and people are losing jobs.

How will people be able to pay their mortgages without a job? Especially since the ALT-A loans are due to reset in a few months. Some people can expect to see up to a $1000.00 a month increase on their loan payments if they are not modified according to Rick Sharga of Realtytrac.

This could lead to a new cascade of defaults, which could further drive down home prices. That coupled with the commercial real estate defaults as more stores close and landlords are unable to pay their loans on malls and storefronts.

Wow. A real life snowball effect.

Some places are already experiencing a phenomena known as "ghost malls". Empty malls and shopping centers devoid of tennanats and customers.

I listened to a real estate "guru" on the radio last Sunday, and he was still pumping out the old song about this whole situation being temporary and get in the market now to maximize you chance at realizing a profit. According to him, by mid 2009 the housing markets will turn around, so you better get in now.

Uh-huh. Sure. Is the Brooklyn Bridge still for sale?

So, what happens if you get to the point where you want to walk away?

If this isn't a sign of the times. Check out this site.

You Walk Away

Sorry the post is kinda disjointed. Tired, but can't sleep. The local news aired the video of a local transit authority cop (BART) shooting and killing a man being held down by two other cops. Really troubled by what is going on. Things are just a freaking mess. Oh, you can watch the video here.