Walking Away

Strategic Default: 32% Believe it’s OK

October 10, 2012

A recent survey by JZ Analytics revealed that a growing number of Americans feel homeowners should be able to strategically default on mortgages. A strategic default is when a homeowner, who has the financial resources to continue making their mortgage payment, instead decides to walk away and let the house go to foreclosure. In many [...]

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Will Strategic Defaults Be the Next Challenge to Housing?

September 12, 2012

Strategic defaults may be the next challenge to a housing recovery. Investopedia defines ‘strategic default’: “A deliberate default by a borrower. As the name implies, a strategic default is done as a financial strategy and not involuntarily. Strategic defaults are commonly employed by mortgage holders of residential and commercial property who have analyzed the costs [...]

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One Thing That Still Concerns Us

November 15, 2011

There is no doubt that the housing market is stumbling to a recovery. This past week Lawrence Yun, NAR’s chief economist, predicted a 4% increase in sales next year. Last month, Celia Chen of Moody’s Analytics projected sales to increase over 20% in 2012. Any increase in transactions will be welcomed. However, we believe there [...]

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Will Falling Values Lead to More Strategic Defaults?

June 17, 2011

As prices continue to soften, more and more homeowners will fall into a position of negative equity on their homes. This means that the balance on their mortgage is greater than the value of their home. The reason this is important is that people are more prone to strategically default on their mortgage when ‘underwater’. [...]

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Negative Equity: Not Good But Improving

December 15, 2010

Back in October, we posted that falling home prices would drive more homeowners into a negative equity situation where their home was worth less than the amount of their mortgage (also known as the house being ‘under water’ or ‘upside down’). If a homeowner falls further into negative equity, it increases the chances that they [...]

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Will Falling Prices Create Wave of Strategic Defaults?

October 25, 2010

Strategic default: when a borrower defaults on their mortgage even though they have the financial ability to repay it. Strategic defaults lead to foreclosures. It is important to realize that an increase in the number of foreclosures will dramatically impact any possible housing recovery. A loss of income or an increase in negative equity (where the [...]

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