A report from Fannie Mae found 27% of homeowners would consider walking away. The previous year only 15% would think of defaulting on a mortgage they could still afford.

by Michael David White at Housingstory.net

A report from Fannie Mae found 27% of homeowners would consider walking away. The previous year only 15% would think of defaulting on a mortgage they could still afford.

Morgan Stanley estimated 200,000 strategic defaults in 2009 or 12% of the total. (Please see the full story at “Walk away from your mortgage? Time to get ‘ruthless’ – CNN Money.)

Most walk-away borrowers are good credit risks with high FICO scores. One Florida couple paid $1.4 million for a house which is now worth $400,000. They are still paying, but not all borrowers would stick with that mortgage.

Consumers are adapting the rationality of professional investors. An investor who purchases an office building will often use a company to make the purchase and borrow the money. If the value fell by half while the mortgage is 70% of the original price, and if the loan is not personally guaranteed, the investor might send in the keys and wish the lender good luck.

“There’s a sense that the banks don’t follow the ‘rules,’ but somehow the little guy is supposed to — more and more people are saying ‘enough is enough’ and walking away,” said Brent White, a law professor at the University of Arizona, and author of “Underwater Home: What Should You Do If You Owe More on Your Home than It’s Worth?”

Help Make A Difference By Sharing These Articles On Facebook, Twitter And Elsewhere:

• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 

Interested In Further Reading? Click Here