Your exasperation comes across loud and clear.What you express is EXACTLY the same sentiments of ANYONE who has purchased a home using financing with appr 20% (or less) down since 2004. They are all upside down meaning they owe the bank more than the price for which the home can be sold.
"I have paid the mortgage for 8 years and still owe $280,000. My house is worth $220,000. I will NEVER get back what I paid originally, I can accept that; but why is it "bailing out" if I sell it to the bank for what its actually worth?
During the last 4 years middle class America has lost 40% of its wealth. In most cases this shows up in the value of their greatest (presumed) asset, THEIR HOMES. Your home likely lost 40% of its value.
Why is it bailing out? You may make an economic decision to not fulfill your agreement with the bank. You may decide to 'bail out' of the mortgage contract. By doing so you 'stick' the lender with a projected loss equal to the earnings minus the sold price. UNFORTUNATELY, the lender with whom you may have worked, (Bank of America, Wells Fargo, Citi, Chase or Never Ever Bank of Clearwater FL) is unlikely to be the one you 'stick it to" because the bank sold this asset (the loan) to someone's pension fund. Perhaps part of your 401K has a aggregate real estate component. Maybe your employer is funding payroll through profits from long term investments with includes real estate mortgages. The banks, the ones who set you up with this loan are no longer a party to it and will not lose a dime should you choose to bailout. Today. just like when you bought your home, banks have every intention of selling the loan to an unsuspecting investor or investment group. If all those buyers since 2004 'bail out' they wlll very likely be 'sticking it' to their neighbor, NOT THE BANK.
Bailing out, by the way, should not necessarily be considered a pejorative term. The best action for you depends on your situation and the economics of your area. You may discover a short sale IS NOT possible for you. You could hand the bank your keys and still owe the balance of the mortgage. Every situation is different. Short Sales or very complex and the most comvoluted process you can imaging. They are the 'Wild, Wild, West of Real Estate," where there is an illusion of rules but anything can and does happen.
You really need to consult a professional to explore the possibilities, the probabilities and follow that with what is best for you and your family. There IS RISK in any action you take. Take the time you need to consult with pros in your area. You have many options. Don't take action without ALL THE FACTS.
Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group, Palm Harbor, FL