With so many homes losing value in the housing crash, there are plenty of people out there who owe more to a bank than their homes are worth, which has created a debate over the propriety of homeowners walking out on their loans. After all, why should they continue paying the full price for something that's lost 10, 20, or 30 percent of its value -- especially if it is through no fault over their own? One of the people facing that decision, apparently, is rapper Chamillionaire:Chamillionaire purchased the 7,583 sq-ft. Houston home for around $2 million in 2006. Now he tells TMZ that the house "isn't worth anything" but that it was still his most expensive mortgage.Explained Chamillionaire when cornered by TMZ's camera on a NYC street:
“So I just decided to make a business decision, to let it go, give it back to the bank. I just didn't feel like it was a good business investment to keep paying that much mortgage for a house that I'm never at.”
But lest you think the rapper is in dire financial straits, he says all is fine: "When I'm a Cha-thousandaire, then you'll have a real story."
While we don't normally turn to financially named rappers for advice about public policy, maybe there's a lesson here to help with the foreclosure crisis.
-- Tim Fernholz
