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 ESSEX MORTGAGE BANK ASKS SHOULD YOU WALK ON YOUR MORTGAGE ? View next topic
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Poll :: SHOULD YOU WALK ON YOUR MORTGAGE ?

# 1 NO WAY IT IS MORALLY WRONG -
0%
 0%  [ 0 ]
# 2 YES THE BANKS WERE DISHONEST THEREFORE THEY SHOULD TAKE A LOSS
100%
 100%  [ 1 ]
# 3 NO WITH EXPLANATION -
0%
 0%  [ 0 ]
Total Votes : 1


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Joined: 13 Apr 2010
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Location: Santa Rosa,California

ESSEX MORTGAGE BANK ASKS SHOULD YOU WALK ON YOUR MORTGAGE ?
PostPosted: Fri Jun 11, 2010 12:16 am Reply with quoteBack to top

This practice is known as “strategic default”, and it is beginning to be a way for those who worry that they will never recoup their costs to just cut their losses and leave. Many people who have negative equity just stop making their home payments, living in the home for as long as possible, or looking for a rental (or even buying a new home) before their credit is affected. Eventually, the bank will repossess the home. It is important to note, though, that even in the event of foreclosure some mortgage lenders may still come after you for a portion of what you owe. With strategic default becoming more common, mortgage lenders are starting to fight back, using legal means to force you to pay at least some of what you owe.

Is It Right to Walk Away from Your Home Mortgage?
The other question, of course, is whether or not it is ethical to walk away from your home when you can afford the payments. When you buy a home, you are taking a financial risk. Another thing to consider is that, due to what a home really costs after you pay interest on your mortgage, the likelihood that any residential home you buy will result in net gains over the long term is quite low. If you are living in a house, you’re already going to be out the money, so maybe strategic default isn’t the answer — especially if you like your house and can afford it.

The other consideration is that you owe the money. Is it ethical to just walk away from that obligation? Some feel that it is ethical, since it might be in your best financial interest to go through a strategic default, as long as you are willing to accept the consequences that come with trashed credit.
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