Its ok for Wall Street to Walk Away From a Mortgage so Why Not You?
When an investment corporation defaults, or walks away, from a property it is called a strategic default. When a home owner can no longer afford their mortgage they foreclose. The Huffington Post and NPR Marketplace have artiles that examine the topic:
A group led by Tishman Speyer Properties gave up the 56-building, 11,232-unit New York City apartment complex. They gave the development to its creditors after defaulting on $4.4 billion in debt. Wall Street Journal. The 2006 $5.4 billion acquisition is currently values at an estimated $1.8 billion.
“We basically walked away from it,” said Clark McKinley, a spokesman for the California Public Employees’ Retirement System [CalPERS], one of several investors in the venture, wrote off its $500 million investment, McKinley said. “It’s underwater, anyway, so we’ve lost it,” he added. “We took our medicine, and we’re learning from it.”
What is frustrating is that there is so much pressure put onto individual home owners to maintain their mortgages and not default. As a Cincinnati Realtor I get calls frequently asking for help selling a property before it goes into foreclosure. There is only so much that can be done becuase of the overall market condition,
Lenders are fighting the hold back a mass of foreclosures. If homeowners begin defaulting on their mortgages, the housing market could faulter gaian and take the economy with it. The New York Times has a list of proposals to help home owners reduce their principals. What is critical is that we need to reestablish stability in the market to prevent a second wave of th
When an investmen
e housing crisis.
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