Strategic Defaults On The Rise?
May 13, 2010 · Jean Joh
Did you catch the latest 60 Minutes episode? It discusses the increase of "strategic foreclosures" where homeowners are walking away from their homes that are "underwater" (worth less than what they owe on it), even though they can afford to pay.
Currently, there are approximately 11 million homeowners in the country who are "underwater", and this number is expected to DOUBLE this year. Some would argue that it's a wise business decision to stop pouring good money after bad, but it's scary to think what would happen if everyone decided to just walk away. Your thoughts?
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3 Responses to “Strategic Defaults On The Rise?”
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Hopefully many of these can get worked out
Jean,
Interesting.
There are many ramifications that one must consider.
Thanks for briging it to our attention.
Brian
Jean,
I have a client that applied for a loan modification but the bank said “No”. With that response they chose a strategic short sale. They fell a bit guilty but feel justified since they tried to modify.
What I am concerned with is if all of these people do short sales, foreclosures, etc. their credit score will be hurt and therefor will not be able to purchase major items on credit curtailing our economic recovery.