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.
Posted by Ben Nicolas on
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