There was an article, I think in the Chron recently, indicating that the highest increase in percentage of people walking away from underwater mortgages were actually wealthy people. They could afford to keep paying the mortgage but it didn't make financial sense so they just took a hike.

I'll admit to giving this some consideration.

Nora,

some friends of mine had to convince their bank to do a short sale on a house they had in LA area. The bank didn't want to do it until my friends told them they would stop paying altogether.

This was around 1999 or 2000. So I am not sure if circumstances will change.

I think you need to report short sales on your income tax so be prepared for that if it happens.

What, exactly, is a short sale? I'm not sure I've heard the term before.

Sell the property for less than what you owe on it. Not sure if the bank eats the cost or if you're responsible. That also goes on your credit report.

(I may have been thinking bitter thoughts about "civilization" recently.)

Me too.

Applying for jobs checks credit score! Which makes sense for a managerial job that has money stuff in it.

NO! NO IT DOESN'T! NOT FOR ANY POSITION! (*ahem*) Please forgive me for yelling, o_a, but credit scores have no place existing, let alone determining if you should be allowed any job at all, because the ONLY thing that number measures is how profitable you are as a borrower. That information can have NO POSSIBLE BEARING on your fitness for any position. Or anything else really.

If I am a crappy borrower, I'm not getting hired in the financial sphere, because I'm considered a higher risk for doing something shady.

Being a crap borrower doesn't make me shady, but it's an employer's market, so there you go. They do also check my arrest record, etc, and have my fingerprints on file. I'm not exactly surprised.

Reading Nora and Steph's posts about being underwater on your mortgages, and that you won't walk away because you want to play by the rules, makes me very sad. Those rules exist only to keep you down, not to make anything "fair" to anybody. In these specific circumstances, I think you guys are being harmed far more by playing by the rules than you would be by ditching them.

I feel so badly for everyone that is underwater in their mortgage and has such difficult decisions to make. Nora, I really hope your new renter works out and you don't have to make any difficult decisions immediately.

My oil delivery has finally arrived, which means I can turn the heat back on, which is good because it is snowing out. Apparently winter has been holding back until today. We're supposed to meet the seller tonight at the house to go over a few things, and I am hoping we don't have to cancel due to snow.

Credit scores can also affect your insurance rates. It's so fucked up. I've learned a lot listening to Clark Howard, but much of it is very depressing.

A slight quibble, Sean. Credit score is more your track history of paying back what you borrow, which lenders use to predict how likely you are to pay back in the future (and, as others have pointed out here, other people use for other purposes). Which isn't quite the same thing as how profitable you are as a borrower.

To be fair, a borrower who doesn't pay back probably isn't very profitable. But lenders adjust for that by making it more expensive for people with low credit scores to borrow.

And no, I'm not going to defend the current system.