Strategic default – on the rise
In recent weeks, I’ve seen a significant increase in inquiries from potential clients about strategic default. I’ve blogged about the pros and cons of this in detail, below, but here’s the short version – many homeowners are tired of paying their mortgages when similar houses in the neighborhood are selling for one-third of they owe. A lot of people just don’t see the benefit of paying $200,000 on a mortgage for a house worth $75,000.
Apparently, the increase in strategic defaults is not limited to my practice, as numerous media outlets are reporting the same thing (throughout the country):
http://www.istockanalyst.com/article/viewiStockNews/articleid/4490544
http://starglobaltribune.com/2010/home-mortgage-loan-strategic-defaults-on-the-rise-2081
http://staugustine.com/interact/blog-post/rusty-collins/2010-09-24/foreclosure-exit-strategy
These articles seem to suggest that as many as one-third of all foreclosures are “strategic” in nature. Apparently, the stigma of going into foreclosure is lessening with each passing day.
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