32% Say OK to Walk Away, 36% Say OK to Poor Credit - Oh Boy

By
Real Estate Team Leader with Atlanta Communities Real Estate Brokerage

Thirty-two percent of Americans surveyed say home owners should be able to strategically default on their mortgages without facing any consequences for doing so, according to data compiled by JZ Analytics. What’s more alarming, 13 percent say they would likely strategic default and another 17 percent say they know others who have already walked away from their mortgage obligations. Thirty-six percent of Americans surveyed also said they believe it’s acceptable to have a poor credit score.

"What jumped out is how many Americans feel it is acceptable for home owners to walk away from a mortgage and go into foreclosure,” says John Zogby, a senior analyst at JZ Analytics and creator of the Zogby Poll. “If Americans carry on with that mindset, it will continue to cause problems as the economy undergoes a slow recovery."

The mindset is a simple one to understand given the current environment and bloodbath of recent years. I speak to folks that have done and consider strategic default and it;'s the same line - "businesses do it all of the time" or "the banks could care less so why should I"?

One of the best articles I've read concerning this topic was written by a financial pro that decided to strategically default and how the result impacted his life. While I don't feel old at 51, I guess times have changed, morally this would really eat at me. Not to mention the destruction of your credit and potential for lenders to chase a deficiency judgment. But since 36% of those surveyed said poor credit isn't an issue....either this is a cash only group or one that has found another way to successfully survive.

From a pure business standpoint though, the idea of an owner saying "screw it" isn't hard to understand. Those of us in this industry see the disdain and combative stance of lenders even toward people trying to do the right thing. Despite all of the publicity surrounding the issues of underwater owner and attempts to "reform" how they are handled by the banks, it doesn't appear that much has changed over the years. Washington made the banks whole during the big bailout, but what's their motivation to work with these owners.....? That's right - nothing.

 

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Topic:
Mortgage / Finance
Location:
Georgia Fulton County
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foreclosures in atlanta
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Rainmaker
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Gene Mundt
Mortgage Lender - Chicago/Chicagoland Mortgages
www.genemundt.com

Hank:  I guess I'm in the same generation as you.  The guilt alone would just about drive me crazy too.  Not sure what will turn attitudes around ..

Gene

October 11, 2012 12:11 PM
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Anna Banana Kruchten
Phoenix Real Estate Agent, CRB, CRS 602-380-4886
Phoenix Property Shoppe

Hank I am not going to judge folks for the choices they make. With over 60% of homeowners way underwater by upwards of 60%, it is their decision on how best to handle their families situation. 

October 11, 2012 12:56 PM
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Hank Miller
Broker & Certified Appraiser
Atlanta Communities Real Estate Brokerage

I don't think I'm trying to judge them, I'm more amazed (if that's the right word) that the idea of this has become more or less accepted - as has the idea that creditworthiness really doesn't matter.

Trust me - we've all seen how obscene these lenders can be and how purposefully combative; at some level it's understandable for an owner to just quit.

October 11, 2012 01:18 PM
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Hank Miller

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Additional Information

The HMT blog is written by Hank Miller of The Hank Miller Team. He is a licensed broker and certified real estate appraiser in the state of GA. Since 1989, real estate has been his full time occupation and Hank consistently ranks at the very top of Atlanta area agents in overall production. He is known as much for his attention to detail as he is for his candor.