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Upside Down Sellers Remain Stuck According to Wharton Study

Homeowners upside down on their mortgages are finding themselves unable to take advantage of professional opportunities elsewhere, move up to nicer neighborhoods, or get their children into better school districts. Mobility in this country, the study found, has decreased in the wake of the foreclosure boom–a surprise to many who assumed that those displaced by foreclosure would be free to move, increasing the overall mobility in America. That Wharton School study, Housing Busts and Household Mobility, found that households who would expect to be upwardly mobile have been stuck fast by the inability to retire their mortgage by selling their homes.

Worldwide ERC, formerly the Employee Relocation Council  claims that approximately 794,000 families relocate each year because of job transfers within the U.S. About 54 % are homeowners, and 46% rent. Worldwide ERC reports that most companies offer to buy at least some employees’ homes if they can’t sell, while 20 % reimburse employees’ selling expenses, sometimes including negative equity.

This has the affect of making it more expensive for businesses to attract employees to key areas, and more difficult for homeowners to climb career ladders and make the better lives they expected to earn for their families. Couple who wish to divorce and start new lives are also finding themselves stuck in a house they share responsibility for.

This does bring an interesting point though for those in high-demand careers who have some leverage with potential employers. A determined firm might be willing to help you out from under a home you no longer want in order to get you into the fold. It can’t hurt to ask.

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