I’ve been blogging about strategic mortgage defaults (which are particularly common in the Phoenix real estate market) since April 2008 – long before “it was cool.” In fact, my one and only Featured Blog here on Active Rain was on that very topic: Phoenix Real Estate Blog: 26% of Mortgage Defaults Are “Strategic.”
The topic of strategic mortgage defaults – when a homeowner who can afford to continue to pay his mortgage chooses to walk away (either by selling the home short or by letting the lender foreclose or, in some states, doing a deed-in-lieu of foreclosure) – has shot to center-stage recently.
So I was flattered earlier this week when Alyssa Katz quoted me in her article on strategic mortgage defaults on AOL.com’s Housing Watch. But I have to take issue with Alyssa’s reference to one of my blog posts, Phoenix Real Estate Blog: “Strategic Defaults” – A Mortgage Lender’s Perspective. She said that I “assured borrowers that a strategic default wouldn’t hurt their ability to get a mortgage in the future.”
I didn’t make that kind of assurance in that blog post. What I said was that in my mortgage-banker friend’s experience the FHA would guarantee a loan for a borrower with a recent short sale provided that the borrower had no late payments on record.
Anyway, the FHA changed its guidelines a few weeks ago and no longer guarantees mortgage for borrowers who have recently sold a home short (with a few exceptions). I write about that issue in detail in my latest blog post, for more information check out Phoenix Real Estate of Affairs: Strategic Mortgage Defaults.
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