Homeowners Walking Away From Mortgage Obligations - Is this the Right Thing to do?

A serious dilemma for many homeowners these days seems to be whether to walk away from a home mortgage obligation when the value of the property is significantly less than that of debt secured on the property.

A growing number of people in Arizona, California, Florida and Nevada, are said to be considering a "strategic default," walking away from their mortgages ... not because they need to but rather because of their own financial interest.

What about contract terms?  A standard mortgage-loan document reads, "I promise to pay" the amount borrowed plus interest. 

Do people have a moral obligation to pay this loan regardless of value of the underlying asset (the home)?

What's the risk of walking away?  It isn't risk-free, and a foreclosure stays on a consumer's credit record for seven years and can send a credit score (based on a scale of 300 to 850) plunging by as much as 160 points.

Homeowner Debtors should thinking carefully before making this important choice.

 

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Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.  Tel. 949-854-7747.  

                   

see article - Debtor's Dilemma: Pay the Mortgage or Walk Away. In Down Real-Estate Market, Homeowners Are Deciding to Abandon Their Loan Obligations Even if They Can Afford the Payments - click here.

 

 

 

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