There is a lot of controversy on whether strategic defaults on mortgages are right or wrong. We are hearing more and more about them in the past year. If you don't know what strategic defaults are here is a quick explanation of strategic defaults. A strategic default is where a home owner intentionally lets the bank foreclose on their home for the purpose of
•· getting a lower house payment
•· getting out from under a mortgage
•· to move into a better school system
•· to buy a bigger house with the same payment
•· to move into a better neighborhood
•· to get back on the right financial path
A strategic default is going into foreclosure on purpose. Those who participate in this choice are people who have the ability to pay their mortgage, have a stellar credit rating and abruptly choose to walk away from their home payment responsibility. They are choosing to go into foreclosure on purpose.
Currently as of January 2010 they are saying about 25% of all foreclosures are strategic defaults.
I myself don't take a stand on whether a person is wrong to go into foreclosure on purpose. It's is a homeowners personal choice. I'm not a judge. No different than to judge a person whether they have an abortion, or to voto, or to believe in a specific god. Not my business. What do you think? Are strategic defaults on mortgages right or wrong?
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