Interesting Takeaways from "Should A Borrower With An Underwater Mortgage Strategically Default?" by Evan Nemeroff
- 31% (15.3 million) of U.S. homeowners who have a mortgage underwater
- nearly three-quarters have properties that are 40% below their buying cost
- When homeowners were asked in the survey why they would not choose to strategically default, 37% cited moral reasons, while 35% indicated it didn’t make sense since they intend to live in that house for an extended period of time.
- The most common reason for avoiding strategic default cited by homeowners was that it is a moral issue.
- Even though one out of every three homeowners with a mortgage is underwater today, Zillow said 90.8% of these homeowners are current on their mortgage and continue to make payments
- The Zillow survey also asked the economists for their opinion on the adoption of government-sponsored mortgage principal forgiveness initiatives for underwater borrowers. The survey found that 72% of respondents opposed any adoption of such programs, while 28% were in favor.
- Last year, one out of every 16 Nevada properties had a foreclosure notice, the report said. According to 500 individuals surveyed who personally experienced a foreclosure in the state, just over one quarter (27%) indicated they strategically defaulted this year, 4% more than the 2011 report.