More and more people who can afford to keep underwater homes are finally making the decision to walk away. Banks unwillingness to negotiate together with financial advisers reporting that it is near folly to continue paying on something that will never make sense has borrowers taking action
MAJORITY THINK IT IS A.... NO NO TO DO
A survey held recently polling people at random reported that over 90% dis-approved defaulting and walking away for moral and ethical reasons. However, what should be considered in the same breath is the remedy that all agreed to up front when contracting.
CONTRACT LAW GOVERNS...NOT MORAL LAW
The mortgage and its processes are governed by contract law which is specific on what will happen, why, and when. Therefore, if someone risks breach, that is one of their remedies as agreed. Bankruptcy court respects that and now the public at large may have to accept it too
THE BORROWERS WAY BACK
It can take 3-7 years to recover from a foreclosure starting from when you activate it. Until then, you are just dragging the process out. FHA will allow defaulted borrowers to re-enter the purchase market right after 3 years prompting borrowers to take action now...not later
EACH ONE TAKES THEIR LOSS
Investors, banks, and borrowers all agree that the original reasons that brought them all together no longer make business sense. The second option of re-visiting the terms to find better ground via re-negotiations isn't working either. Now, it appears that everyone must take their loss and move on
ECONOMY WILL BENEFIT
Perhaps the economy will recover from this thinking. I know that failure to bring about some change and just repeating or maintaining the current status quo isn't working plus it imitates insanity. This will never do
STRATEGIC DEFAULTER
Strategic defaulters still suffer from the decision to let go and in time, can re-enter the main stream for another go at it. The only comfort they have is that it is happening to so many people making it more of an epidemic instead of a personal affliction and it will help future Real Estate values
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