Have You Considered Walking Away?
by Tim Manni
We’ve talked a lot about walking away from your mortgage (strategic defaults) on this blog. We’ve asked readers to weigh in on the subject (both in the comments section and in our poll), and we’ve had some differences of opinions over whether or not borrowers are obligated to stay in their homes.
The May 2010 edition of Money Magazine published an interesting poll that asked readers, “Would you ever consider walking away from your home loan?” We wanted to share their results:
Never: 42%
Only if I had to: 38%
Yes: 16%
Already have: 4%
We’ve defined walk aways, or strategic defaults, as borrowers who voluntarily defaulted on their home loan (even though they could still afford to make monthly payments). According to the May edition of Money, 26% of homeowners “defaulted when they could afford to pay their loan.”
Here are some other really interesting stats we found in Money’s latest issue:
Question = Say your credit score is 780, how would a short sale impact your credit score?
Answer = It would drop by 150 points.
Question = How many U.S. homeowners have a mortgage balance that exceeds the value of their home?
Answer = 11.3 million.
Question = What credit score do you need to qualify for the best mortgage rates?
Answer = 760
