Interesting that nearly half of home owners recently polled in an online survey said they would walk away from their mortgage if home prices continued to fall. The poll included 1,000 visitors to HousingPredictor, a real estate Web site.
While the poll is unscientific, we question whether home owners are starting to grow more acceptance of the strategic default idea? Strategic default is when home owners walk away from their mortgage obligations, despite being able to make their payments.
In a similar poll in March 2010, HousingPredictor found that 32 percent said they would strategic default if prices fell further — compared to 47 percent in the most recent poll.
But for home owners who walk away from their mortgage obligations, they often do so with later regrets. Experts caution that home owners take a big hit to their credit score — a 30-day late payment alone could bring your credit score down by 100 points, says Glamis Haro, a lending manager who was interviewed by AOL Real Estate. Defaulters may also have to wait up to seven years to even apply for a mortgage again.
Source:“Strategic Default: Would Half of Home Owners Walk Away?” AOL Real Estate (March 9, 2012)