House Hold Mold

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Good morning. I’m splitting the Jim Cramer post in two, because the trashing of the Inland Empire (he says it’s such a housing disaster it needs to be plowed over) is overshadowing his advice to upside-down homeowners: just walk away from the house and the mortgage.

Cramer on walking away: ‘When your house drops 20% in value, then it doesn’t matter whether you’re prime or subprime. It’s better to walk away, even if you’re wealthy. Because you don’t want to lose your credit card, and you don’t want to lose your car. Your house is the one thing that’s fungible. It’s smart to walk away... It’s actually a good thing. I know that sounds a little counter intuitive. But if your home declines 20% in value, it’s really important to sell it, or walk away from it.’

Strong stuff considering this guy is probably the most prominent investment advisor on television today.

Your thoughts? Comments? Play investment advisor for a second: what do you advise someone who paid $500,000 for a house, still owes all the principal, and the house is now worth $400,000?