Strategic Default is always an option:

There have been several mentions on this blog site about 'Strategic Defaults'.  I see that there is now a web site which has information on the subject: http://www.youwalkaway.com. If this option is under consideration you might take a look at their site but of course they are selling a service and you might just cut out the middleman and find a local attorney who handles property issues.

"A Strategic Default is when a borrower decides to stop paying a mortgage even though they may still be able to afford the payment. When the value of a property has fallen far below the mortgage debt and recovery of the equity lost is expected to take years, a borrower may elect to default. . ."

It makes no sense to me that Owners who have paid list price for something that is now worth about half that amount would remain in the property. It will be many years before your condo is worth what you paid for it initially and in those years you will be stuck with quarterly condo fees, your mortgage, insurance and taxes

Even renting out your condo will probably not provide enough income to cover the above costs. I am sure that the only happy owners here are those who took advantage of the very low prices on those foreclosed units. We have had 27 foreclosures filed so far with 8-9 units now with new Owners and the rest still winding their way through the estimated 2 year process. 

Some new buyers are simply using the condos for rental income (ie:  investments), this will work for them due to the very low prices they have paid to obtain the units.  They are of course in competition with the developers 56 units which tend to rent first due to the low prices Concord is asking for them.  

If you would like to see what rentals are going for here, go to http://panamacity.craigslist.org/  and under the 'apartments/housing' section enter 'Nautilus Cove' in the search bar and the last 45 days worth of advertisements for condo rentals here will be displayed (19 listings as of today).  You will see Owners prices vs. Concord/Developer prices.

Also see these sites which are The Consumerist and CBS TV Sacramento: http://tinyurl.com/5rk4l76  and http://tinyurl.com/3jbanrd

Prior Posts on this blog are: "Is a "Strategic default" in your Future?" of 4/24/11 and "More on Strategic Defaults" from 5/8/11.

More on Strategic Defaults -

You will notice considerable information on this blog regarding this topic, this is something that several owners have taken advantage of and others will also do this. 

Throwing good money after bad simply makes no sense at all.  Once upon a time it was considered disgraceful to default on a debt, today that stigma no longer exists and the theory is simple - the banks and mortgage companies created this mess, and to walk away from an underwater condo presents no stigma in todays society, most people think that the banks deserve it.

"If you own a home that is 50% underwater, 70% underwater, it will never ever, ever come back to where you purchased it." said Suze Orman, consumer advice columnist, who continues,  “Do the calculations everybody. How much is it costing you to actually stay in that house? How many years will it take for you to pay more than that house is worth? If it’s 3 years, 4 years, 5 years; are you kidding me? That’s a house you really need to say bye bye. It’s not worth the money.”

Why pay a mortgage when you can rent the same unit for 2/3rds of the mortgage cost, PLUS not pay taxes, quarterly dues, and insurance?  Of course your credit will be dinged for 7 years but that seems a small cost to pay to get out from under a major monthly payment that really has no benefit for you.  Banks and mortgage companies are in no rush to toss out non-paying owners, they don't want the units either and letting them go for a year or more is not at all unusual.  You can usually continue to live in the unit for 12+ months after you have stopped paying.

Sites below are The Consumerist and CBS TV Sacramento: 
http://tinyurl.com/5rk4l76  and http://tinyurl.com/3jbanrd