SCOTTSDALE, Ariz. — Four years ago, Mr. Gindlesperger, a police officer, and his wife Kelly, a real-estate agent, paid $650,000 for a four-bedroom house in this wealthy Phoenix suburb. They believed they were getting a bargain price for the area and made a 20% down payment, using a 30-year fixed-rate mortgage to pay the balance. To help pay for their eldest daughter’s college costs, home improvements and a wedding, they took out a second mortgage against their home. Now they owe about $647,000 on the two mortgages. But home prices on average have dropped about 48% in the Phoenix area since peaking in mid-2006, according to the First American CoreLogic index…Families like the Gindlespergers are among millions of Americans who are “underwater” on their mortgages, owing more than the current value of their homes, and they face a dilemma: Keep making payments and hope for the best — or walk away, give up their home and accept the seven-year blemish of a foreclosure on their credit record.
By James R. Hagerty, Nov. 25,2 009 WSJ

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