A Review for – Underwater Home: What Should You Do if You Owe More on Your Home than It’s Worth?

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The Lowest Price we could find is $18.95 $16.00

Underwater on your home? Dont know what to do? Let one of the the nations leading experts guide you to the right decision. In Underwater Home, Professor White addresses all your concerns and helps you work through the emotions and practical realities of being underwater on your home. He explains your options and gives you the facts that will empower you to make the best decision for your family, free from guilt or fear, and with clarity, confidence, and peace of mind. Underwater Home is both an emotional and practical guide for the underwater homeowner. Professor White explains when it makes financial sense to stay in your underwater home and when it makes sense to get out. And he offers no-nonsense insight into how to negotiate with your lender. If youre underwater on your home, you cant afford not to read this book. In a tone that is both conversational and precise lays out the case for and against walking away from an upside-down mortgage where the home is worth less than the mortgage balance. As is his habit, Mr. White strips away many of the emotional reasons that are often touted to deter walkaways. Wall Street Journal, Decemeber 7, 2010. Underwater mortgage? The book banks and Fannie hope you wont read. Reuters, December 15, 2010 Law Profs Book Helps Underwater Homeowners Decide When to Walk Away ABA Journal, December 8, 2010. A how-to book on strategic mortgage default. Orlando Sentinel, December 15, 2010 Brent White, a University of Arizona law professor who has preached the morality double standard that homeowners face while companies default on loans without so much as a second thought, now makes his case in a book that virtually holds homeowners hand through the process. He tells them what to consider when deciding whether they should stop paying the mortgage White even walks homeowners through the math to figure out whether theyre better off staying put and or walking away. Orlando Sentinel, December 15, 2010


Review:

First off, for the price, I was expecting way more information than what is in the book. At first glance, it just seems like a high school student trying to meet a word quantity requirement for an essay: overly large font, even larger margins, etc.

Anyway, for the titles question of what should you do if you owe more on your home than its worth? the author has two solutions: strategic default or keep the house. While somewhat informative, I felt that the author never really came to any specific conclusion or made any statementother than the legal statement at the beginning saying that the book is not meant to give advice, just offer possible courses of action. Fine. Hes clearing himself of legal liability, but then the rest of the book is pretty much non-committal as well. White does a great job in explaining why guilt and shame have no place in the decision about what to do in the underwater situation, and even goes on to tell how the industry uses those tactics to keep people paying their mortgages.

But where the book fails, for me, is that White seems to be pushing the strategic default concept a little too hard. Im open to trying strategic default, but his explanation of the consequences of doing so is sparse. He has some anecdotal material from people whose credit scores werent too affected by defaulting and purportedly bounced back in a matter of months, but there is no clear connection between how a default affects ones credit scores specifically. Defaulting on a mortgage could free up money to pay off credit card debt which, in turn, would help your credit score increase again, but what if youre not in credit card debt? Then what happens if you default on your mortgage? How low does your score go? It would have been nice to have more expanation and investigation into this aspect. He seems to not have a clear understand of how the credit reporting agencies tally up your FICO score, and brushes it off to say that its a closely guarded secret.

White also claims that credit scores arent as important as the agencies would like us to believe. Great, but there is no real evidence to back it up. The author says that it shouldnt hurt your chances of being offered a job (unless youre in a specific job that requires you to handle financial matters) sinceyou can just be honest at the interview and explain why theyd see a default on your credit report, but if Im going up against other interviewers (and in this job market, thats a given), then all other things being equal, my credit score could hurt my chances of getting that job.

He also explains in some detail what repercussions there could be to defaulting in terms of the banks coming after you for money that is owed. I would have like a more concise compilation of state laws and the options the banks have for recourse. He didnt mention much about one-action statutes.

All in all, if youre looking for a book explaining what a strategic default is or if youre feeling anxious about defaulting as an option, this book does a great job of explaining what a default is and helping to put emotions in perspective. However, if you already know about dafaulting as an option, then this is more of a lightweight read.

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