If one were to rely solely on the headlines, he or she might be tempted to think that all mortgage-holders whose home loans were underwater were walking away from their mortgages and allowing the property to go into foreclosure. Admittedly, some do purposely plan a strategic default, the term that refers to consumers who can afford to make their mortgage payment, but choose not to since the value of their home has decreased.
However, the National Foundation for Credit Counseling's (NFCC) 2010 Financial Literacy Survey revealed data that supports consumers' ongoing efforts to stay in their homes. When asked if they were unable to meet all of their financial obligations, would they be more likely to keep their mortgage current, or their credit cards current, 91 percent of respondents said they would pay their mortgage first. The survey also asked under what circumstances, if any, they would consider it justifiable to default on a mortgage. Only 23 percent of respondents answered that foreclosure is justifiable if the property is now worth less than what is owed on it. Further, 15 percent replied that there is no justifiable circumstance under which it would be acceptable to default on a mortgage.
The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. The NFCC's mission is to promote the national agenda for financially responsible behavior and build capacity for its Members to deliver the highest quality financial education and counseling services. NFCC Members annually help four million consumers through close to 830 community-based offices nationwide.
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