May 10, 2010

"Strategic Defaults" - Borrowers Who Can Afford Their Homes, but Walk Away

Hello Neighbors,

60 minutes did a story last night on something we see in this business on a daily basis.

"Strategic Defaults". When a home owner CAN afford their mortgage, but they decide to walk away from their home and let it go to foreclosure.

Here's the link:

Although I agree with the depression-era view - that losing your house is the last straw - it's clear not everyone else does.

Regardless of your moral or ethical view of this trend, the economic impacts are something to find concerning. We simply don't have economic models for this behavior.

We know banks are sitting on foreclosed homes and not releasing them to the market. If 1 of every 5 upside down borrowers is choosing to walk away, then the foreclosure rates are going to continue to be record setting for years to come.

If you need to short sell, give Neighborly a call.

Please don't walk away. We can help you protect your financial future by doing the right thing.

- Jim (making small steps forward)

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