According Corelogic`s report dated November 29, 2011, 22.1 percent of all
residential properties with mortgage were in negative equity at the end of the third
quarter of 2011. Another 5.16 percent of homes had less than 5% equity but,
considering selling costs which are typically 8 to 9 percent of selling price,
those with 5% equity do not have equity at all. So, when added together, one of four homes is in trouble.
Of course, people walking away from homes are not limited to
homeowners with hardships but also people who may not be suffering a financial
hardship but look at the situation like business.Certainly, if the home is worth less than the
amount owed to the mortgage lenders, it does not make sense to keep paying for
the mortgage. I have heard the phrase
strategic default used and many are exercising this strategy.
People often ask what their options are. Here are the options:
Stay and Pay
For more information, or to schedule an appointment with an experienced lawyer
regarding representation on a bankruptcy or real estate-related matter, please contact us.