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.
Stay away from payday loans, reverse mortgages, and, even if it’s for your best buddy, cosigning a loan. Also, it really is best to keep up with your mortgage payments, even if you’re underwater and walking away seems like the best strategy.
Also, who is responsible for the all-too-common scenario in which homeowners can’t keep up with their mortgage payments? Most people blame homeowners for taking out loans they couldn’t repay, rather than the banks that facilitated those loans.
It is estimated that by June, about 10% of all homeowners with mortgages will owe more than their homes are worth. With strategic defaults on the rise, many homeowners who actually do keep paying the mortgage each month are increasingly feeling like suckers. Are we headed for a mass default?
You’ve probably heard that a high-profile realty group that had agreed to pay $5.4 billion for a New York City housing complex just announced it was not going to make good on its loans. You might describe the (former) owners as misguided, stupid, or unfortunate. You probably wouldn’t think of calling them immoral. So why [...]
