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 photo credit: lorenzaccio*
Mortgage defaults have always been around, but we are now seeing a rise in strategic defaults. The economy has hit us all pretty hard, and some more than others. People who would normally pay their mortgage and other bills without question are being forced into a corner with no choice but to walk away from their mortgage. This happens when two events are present, the first, a loss of income, and the second, a negative equity in their homes.
Normally, if one of the two happens, people will ride it out and find a way to pay their loan and stay in the home. On average people want to stay in their homes, its not that we are seeing a flood of shifty people, these are our average, everyday, middle class, hard working, backbone of America people, and they are in trouble. As a rule, if a homeowner has positive equity, but experiences a loss of income they will sale the property and the mortgage gets paid off, but these days we see people simply walking away from their homes.
Recent studies show that a routine default accounts for only one fifth of defaults, and its four fifths these days that result from the double whammy of a loss of income and a negative equity. These are scary numbers. There are signs of a recovering housing market, but we also need a recovering jobs market. Elections are coming up again soon; maybe they will start doing something that will benefit us to get elected.
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Posted on September 20, 2010 11:17:37 by  IPTV.Boyz
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