The Affluent Strategic Defaulters

We have some high-quality stuff today. Reading the New York Times this morning, we noticed that we are hearing the phrase “strategic default” a lot more lately. Strategic default is essentially letting your property go into foreclosure. The home owner chooses not to make payments because the value of your house has gone downhill. The house owner might also not be making payments since eventually they will not be able to make payments. So they are simply speeding up the foreseeable.

Core Logic came up with some fascinating data on what the wealthy are doing with their money and what some of the middle class are doing with their cash. More than one in seven home owners with million dollar loans are seriously deliquent. Below a million dollars, the figures are just one in twelve homes. Core Logic chief economists deem that the wealthy are a little more merciless. Fannie Mae and Freddie Mac are begging home owners to keep making their mortgage payments, but the wealthy are not obligated to do so.

Investment homes with an original mortgage over a million dollars, have a deliquency percentage is 23%. For cheaper investments the deliquency percentage is around 10%. The affluent and successful are less prone to the disgrace and fear mongering utilized by the gov’t and mortage banking business to keep underwater home owners from acting in their financial best interest.

It is remarkable that the piece of writing says bad things about the affluent making this business decision. Many lenders are addressing strategic default. We don’t make a position on either side of it. However, the affluent are making a good business decision. If the middle class was a little more financially skilled, maybe they would make the similar choice.

Minnesota Short Sale Shift can answer your questions. We are Minnesota’s Foreclosure Avoidance and Short Sale Specialists.

Get more help from short sale Realtors, Josh and Sarah, at Short Sale Shift presented by the Short Sale Specialists of Minnesota