Strategic defaults are something I’ve written about several times over the past few years and is something that there are very strong feelings within the industry at opposite ends of the spectrum on in terms of whether they are OK to do or not. A strategic default is essentially when someone that has the ability to pay their mortgage but, usually because they are “underwater” (meaning they owe more than the property is worth), choose to “walk away” and allow the home to go into foreclosure. Almost one-third (32 percent) of Americans think there is nothing wrong with doing a strategic default, according to survey results just released by ID Analytics. The survey also found that 13 percent of Americans would like do a strategic default themselves and 17 percent know someone that has strategically defaulted on a mortgage. John Zogby, senior analyst at JZ Analytics said “our research into the consumer opinion of the economic crisis of 2008 found alarming results,” Zogby said. “What jumped out is how many Americans feel it is acceptable for homeowners to walk away from a mortgage and go into foreclosure. If Americans carry on with that mindset, it will continue to cause problems as the economy undergoes a slow recovery.”.
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