Strategic mortgage default has “really been a blessing,” says one Florida man, who stopped making payments last summer. His mother, who lives a few blocks away, has been in default since the spring of 2008, and says, “the longer I’m in foreclosure, the better.” They both pay a lawyer not to actually help them keep their homes in the long …
Mortgages
Tips Round-up! 104 Tidbits to Help You Save on Baby Goods, Buy a Foreclosure, End Destructive Behavior, and More
Also, financial secrets that your millionaire next-door neighbor will never tell you—starting with the fact that he’s actually a millionaire.
Bad at Math? You’re More Likely to Default on Your Mortgage
Sounds pretty darn logical, doesn’t it? One study shows that 20% of subprime borrowers who are bad with numbers were in foreclosure, compared to just 5% of subprime borrowers who scored high on financial literacy tests. As for the banks and agents who agreed to lend money for these subprime mortgages in the first place, it is unclear how …
Strategic Mortgage Default: Walking Away Is the ‘In Thing to Do Right Now’
Underwater homeowners explain why they’re walking away from their mortgages, even though they can afford the payments.
Why ‘Buyer Beware’ Is Bad for Business
An ethicist argues that we must abolish caveat emptor and mandate truth in advertising. If that can be done, he says, it’ll be good not only for consumers, but businesses and the economy as a whole.
Survey: Homeownership Not as Solid an Investment as You Once Thought
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.
What Can Happen If You Walk Away from Your Mortgage
Walking away from an underwater mortgage does not necessarily equate to washing your hands of responsibility. By opting for strategic default on your mortgage, you could be risking a lot more than just your credit score. In many states, lenders can sue you for what it still owed on the mortgage, and they can do so years after you’ve …
A Bad Credit Score Can Cost You Over $200K
Two friends go about their lives, taking out student loans, buying cars and homes, and taking on a bit of credit card debt. While their expenses are identical, their credit scores—and corresponding monthly payments and interest charges—are not. Over a lifetime, the person with credit rated “fair to poor” can expect to pay over …
How Homeownership Is Like Marriage
There are forces that eagerly want you to enter these institutions—the federal government with homeownership, nagging family members with marriage, and society as a whole for both. You hear over and over that entering into these commitments is the fulfillment of a dream. But neither homeownership nor marriage is right for everyone. And …
Dollar Store: Great Values or Total Waste of Money? And 5 Other Consumer Debates
Five Million Homeowners Underwater. How Many Will Walk Away?
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?
Double Standard: Of Morals and Mortgages
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 is the average …