Just three years ago, Chris Deaner paid $262,500 for his Sun City, Ariz., house. Today, it’s worth about $140,000. In a 60 Minutes segment on strategic defaults (which is the term for walking away from a mortgage because your home has greatly depreciated in value, even though you can afford the payments), Deaner says that of the 44 houses on his street, 16 houses went into foreclosure in the past year. He says his house will be number 17.
He can afford his payments, but has decided to walk away from his “underwater” mortgage, a decision that makes him part of a growing trend: 60 Minutes reports that in the past year at least one million Americans walked away from mortgages they could afford.
He’ll take a severe hit on his credit, but he’s decided that’s the lesser of two evils.
“Just the negative equity with it, the $102,000 that I’m underwater right now, it would take about 17 years for me to dig out of that equity, just on the appreciation alone,” Deaner says. “I decided it was in my best interest and my family’s best interest for me to walk from it.”
The segment takes a look at how the strategic default, while still considered by many to be a moral decision, is becoming more widely accepted as a simple personal business decision. Yale Economics Prof. Robert Shiller tells 60 Minutes that he expects the practice to become less stigmatized as more homeowners give up on their underwater properties.
Similar Posts:
- When Bankruptcy and Foreclosure Go Hand-in-Hand
- How Does My Home Compare To Your Home?
- Payoff Mortgage – Turn Your Home Into An Asset 107
- 3 Types of High Risk Mortgages Homeowners should avoid
- 20 Most Important Terms To Know About Home Loans
