Thirty-two percent of Americans surveyed say home owners should be able to strategically default on their mortgages without facing any consequences for doing so, according to data compiled by JZ Analytics. What’s more alarming, 13 percent say they would likely strategic default and another 17 percent say they know others who have already walked away from their mortgage obligations. Thirty-six percent of Americans surveyed also said they believe it’s acceptable to have a poor credit score.
"What jumped out is how many Americans feel it is acceptable for home owners to walk away from a mortgage and go into foreclosure,” says John Zogby, a senior analyst at JZ Analytics and creator of the Zogby Poll. “If Americans carry on with that mindset, it will continue to cause problems as the economy undergoes a slow recovery."
The mindset is a simple one to understand given the current environment and bloodbath of recent years. I speak to folks that have done and consider strategic default and it;'s the same line - "businesses do it all of the time" or "the banks could care less so why should I"?
One of the best articles I've read concerning this topic was written by a financial pro that decided to strategically default and how the result impacted his life. While I don't feel old at 51, I guess times have changed, morally this would really eat at me. Not to mention the destruction of your credit and potential for lenders to chase a deficiency judgment. But since 36% of those surveyed said poor credit isn't an issue....either this is a cash only group or one that has found another way to successfully survive.
From a pure business standpoint though, the idea of an owner saying "screw it" isn't hard to understand. Those of us in this industry see the disdain and combative stance of lenders even toward people trying to do the right thing. Despite all of the publicity surrounding the issues of underwater owner and attempts to "reform" how they are handled by the banks, it doesn't appear that much has changed over the years. Washington made the banks whole during the big bailout, but what's their motivation to work with these owners.....? That's right - nothing.