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Should homeowners walk away from underwater mortgages?

Most Americans are opposed to the idea according to recent survey

Dennis Norman St LouisThere have been several stories published on this site concerning borrowers that are “underwater” (owe more on their home than it is currently worth) and whether they should simply “walk-away” or do a “strategic default” in order to get out from under their problem. We have published views from both sides of this argument and both sides have made good points in support of their position. However, according to a survey conducted by FindLaw.com, it is clear that the majority of Americans, 60 percent to be exact, believe it is “never OK” for homeowners to walk away.Of those surveyed, 34 percent do feel it is OK for homeowners to walk away from mortgages but only if they aren’t able to make the monthly payments. Only 3 percent believe that homeowners should be able to walk away from mortgages anytime they want.

“Many homeowners are currently facing very difficult and complicated situations involving their home mortgage, in some cases even including the threat of foreclosure,” said Stephanie Rahlfs, an attorney and editor for FindLaw.com. “But before making any major decisions, homeowners should consult with financial and legal professionals, including accountants, real estate attorneys and financial advisers. Any major change to a mortgage situation could lead to serious and unanticipated consequences involving taxes, contract law, credit scores, ability to borrow in the future, potential for lawsuits, and much more.

“Various government programs and tax changes involving mortgages have been enacted since the beginning of the housing crisis,” continued Rahlfs. “Combined with private programs and variations in state laws, it creates a complicated web of potential actions available to homeowners, who should carefully consider the benefits and drawbacks of their decisions.”

Free online resources such as the FindLaw Real Estate Center (realestate.findlaw.com) can provide helpful information on mortgages, foreclosure and the legal implications of real estate decisions, as well as help finding a local attorney who specializes in real estate law.

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