[youtube=http://www.youtube.com/watch?v=omJSA0yl_30&hl=en&fs=1&]
I’ve got a new story* up on Time.com about people intentionally defaulting on their mortgages. The piece begins:
Up to 26% of U.S. homeowners who stop paying their mortgage may be doing so intentionally, not because they can’t make the payments but because they don’t want to put money into a house that’s worth less than what they owe.
Catchy, huh? Well, I do spend much of the rest of the piece explaining why we shouldn’t take that figure at face value—so I highly recommend reading the entire article here.
Here is the piece of research my story is based on (it’s a PDF). It was written by Luigi Guiso of the European University Institute, Paola Sapienza of Northwestern University and Luigi Zingales of the University of Chicago. Here is the other piece of research I mention, by the Boston Fed’s Christopher Foote and some other folks.
Barbara!
*Neither the title of this blog post nor the inclusion of a song that counsels “just walk away” should be taken to mean that I, personally, endorse such responsibility-shirking behavior. Simply that I was trying to be clever.