Tuesday, September 15, 2009

Unable To Sell Their Houses, Millions Of Homeowners Are Turning Into Landlords

Buying a new house last December was an easy decision for Brad and Melanie Juarros.

They had been eyeing foreclosed properties for months in their Sacramento, Calif. neighborhood just north of the American River. The house the couple wanted to buy was bigger, the $140,000 price within budget and the interest rate low (five percent for a fixed-rate mortgage). Even though they hadn't yet sold their present home, the Juarroses bought their dream house.

But there was a problem. Like millions of Americans, the couple owes more on their present home than it's worth. More than 15 million homes are mortgaged for more than their value, according to an August report by real estate research firm First American CoreLogic. About one in three homes with a mortgage fall into this category. The Juarroses owe about $83,000 on their home and they say they are worried that they won't be able to sell it for that much.

Rather than selling at a loss, they decided to rent out their old home to tenants. In doing so, the Juarroses join a growing number of homeowners who have become landlords, often reluctantly, as they struggle to sell during one of the worst housing markets in recent memory. The most prominent example may be U.S. Treasury Secretary Timothy Geithner, who after failing to sell his $1.6 million home in a New York City suburb found tenants instead.

Read more http://www.huffingtonpost.com/2009/09/14/unable-to-sell-their-hous_n_283655.html

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