Every homeowner struggling with their payments is making the decision of maintaining increased payments or face foreclosure. The latter has a high risk of derogatory credit and foreclosure. So the burning question when faced with this dilemma is “Should I stay or should I go” or should I refi my home?

The facts are that many people took cash out, borrowed more than they can afford, took teaser rates, or applied using some form of a stated income loan which would often over inflate the borrowers actual income through the home refinance or home purchase process. Every lender across the country has made it more difficult to get a refinance due to lower home values and mortgages with a higher balance than what its worth. When a borrower decides to vacate the property the bank is just taking the house through foreclosure. Can this be the best option?

I don’t have the right or wrong answer here but I do know that up until the 90’s most people bought a house as a place to live and somewhere to stay and raise a family.That might be a Walton’s way of thought but sometimes the truth hurts.Just a little more than a decade ago we saw an increase to 7% per year for the US home value average.  Lending practices began to recover from the S/L crisis and a new way of thinking was born in the lending world. Your still alive right?When was the last time you reviewed your credit report?  Well then you clearly must be able to pay for a house.With that in mind you might be able to say stated income and teaser loans were common, due to a housing prices from the mid 90’s.Now we see the exposure with home values increasing too fast and people tapping equity to purchase luxury items. Most used the money to “keep up with the Jones” purchasing big ticket item they really had no business of buying in the first place.

Fast forward about 10 years to 2008 we are all faced with the dilemma should I stay or should I go.  If I walk from my home I can buy another house in two years(in theory) based on current lending standards which if property values keep going down I can buy another house or maybe even buy back my existing house at half the price I used to owe on before I walked.  This is all true you can walk, you could buy your home for less, but do you really want to?Recent news articles and coverage of the crippled housing market is only encouraging people to leave their houses and break the agreements they made with lender.   Again You knew what you were doing when you took the cash out home refinance, you knew what you were doing when you bought the home, don’t bring everybody else down even further as somewhere along the line we must just stop this madness.To avoid a depression we all need to keep in mind it is in our power to save our homes and the economy.