Guess what happens when you stop paying the mortgage? For quite some time, the answer is: Nothing much. In many states, while the foreclosure process drags on for years, homeowners who have stopped paying their bills can live in the property in a situation that amounts to “free rent,” as it’s been called. One couple in Maryland may be the masters of this approach: For five years, they’ve lived in a five-bedroom, 4,900-square-foot home originally purchased for $1.29 million, and they’ve never paid a single mortgage payment on the property.
Two years ago, a national debate raged regarding strategic default: Was it wrong to walk away from one’s mortgage? Or, when a homeowner is underwater—owing more than the home was worth—is it a purely business situation in which concepts of right and wrong just don’t apply? Some homeowners dutifully kept up with their mortgage payments. [...]
Adding to the list of post-recession terms such as “unbanked” (individuals without checking or savings accounts), “anti-dowry” (student loan debt holding you back from getting married or buying a house), and “Groupon remorse” (regret felt upon buying a daily deal you can’t use or never really wanted), here’s a roundup of zeitgeist-y phrases, including “squatter’s [...]
A just-released study aims to get inside the minds of underwater homeowners and predict who is most likely to default on purpose. Certain owners, the study found, are 110 times more likely to strategically default—i.e., stop paying the mortgage even if they have the money to keep paying. This sort of data has got to [...]
This shouldn’t come as news to anyone, but these statistics show just how bad of a time it is to try to sell a house—and also how difficult it is for many homeowners to afford the ones they have.
Brent White, the University of Arizona law professor who is a leading proponent of strategic default—i.e., walking away from a mortgage when it’s in your financial interest—is leading an online seminar for underwater homeowners next week, after a similar seminar recently sold out.
If you’ve been following the underwater mortgage epidemic and the related debate concerning to default or not to default, here’s an epic must-read that’s nearly 5,000 words long—and that has attracted well over 3,000 reader comments.
One of the leading proponents of strategic default—a.k.a. walking away, even when you have the money to keep up with mortgage payments—says there are three situations in which it’s actually a good idea to keep paying the mortgage.
Wanna do your share to create jobs, help retailers and small businesses, and get the economy booming again? If your answer is yes, then you might want to start by defaulting on your mortgage.
They’re the two most-talked-about recession-era creatures: the unemployed American who has maxed out on 99 weeks of unemployment benefits, and the homeowner who can afford his mortgage but walks away from it anyway because the home no longer seems like a good investment. So what’s it really like to be one of these prototypical Great [...]
Plenty of old ideas clearly haven’t been working. So why not consider some new ones, even if they seem a bit impractical and “out there”?
