Strategic Default?
Short Sale Maryland
Is 2010 the year of the strategic default?
Are short sales the solution?
If you take away the incentive to homeownership for equity growth. . .are peorple willing to sacrifice working two jobs just to keep a house that is completely underwater?
Where is the incentive when you see banks bailed out by the Goverment for their mistakes and yet. . they continue to give themselves bonuses and use that money NOT TO HELP HOMEOWNERS but to acquire other smaller banks to get bigger.
I do predict that 2010 will be the year of the strategic default. .
I have been reading more and more about Strategic Default, where a borrower decides as a financial decision to default on their mortgage.
This is becoming more and more common as the mortgage meltdown continues and this part of it is one side that many didn't see coming. If a borrower looks at a mortgage where their payment is, say $4000 per month, the value of the home is down by $300,000. they look that it will take 10 years to get that value back but in the meantime they have paid an additional $400,000, default and your credit recovers in 2-7 years, Save the money, get the asset back to the bank and move on.
Why not? is it immoral? Should it be allowed?
My inital response is it should not, why should they be allowed to get out and so on, then i go on to think why not, the large corporations are doing it according to the New York Times Morgan Stanley has just decided to stop paying on 5 buildings in San Francisco that they purchased at the height of the boom, If they can do it why not the individual that is struggling to make ends meet or the person with an ability to give the home back and financially recover in a few years?
http://www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.htm
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