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Strategic Default Not Best Option for Underwater Mortgages

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  • William Matz | | 27 Jul 2012, 12:52 PM Agree 0
    As for most surveys, the results depend upon the wording of the question. Here, if the question is, "Would you default JUST because your home is 40% underwater?", probably most will say no. But that decision will be influenced by a host of other factors, e.g. no lender recourse, ties to house, stability of job, need to pressure lender for modification, availability of other housing, etc. I suspect most would consider it if the combination of factors so indicated.
  • Mark Moore | | 30 Jul 2012, 04:05 PM Agree 0
    I agree with Mr. Matz. If you asked the average family with severe negative equity: "Would you strategically default if it meant the difference between your children going to college or not?" Most families are encouraged not to think of the negative equity as "real." They are told it is only underwater on paper. But the $100K they spend over the next 5 to 10 yeas paying down the very real negative equity *could* have been put into a college savings fund.
  • Dick Salisbury | | 31 Jul 2012, 10:30 AM Agree 0
    For those underwater homeowners with a non-conforming jumbo mortgage who are at least 10% upside down, there may be a solution worth considering where:

    - you remain in your home
    - positive equity is restored
    - monthly payments reduce
    - credit is unimpaired

    I represent a private funding group who work with homeowners who have jumbo mortgages and good credit to achieve the outcomes described. No fees are charged - success fee only. Legal, moral, ethical. No success can be guaranteed, but our group is settling quite a few just recently...
  • William Matz | | 01 Aug 2012, 11:17 PM Agree 0
    I am working with a rep for the same/similar jumbo program. But I have a hard time seeing why lenders will sell a performing mortgage at a discount. That was the basis of Hope for Homeowners, but lenders refused to participate.
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