3 Reasons the Term “Strategic Default” Is Misleading
In a recent study, the Chicago Booth/Kellogg School Financial Trust Index found that a full 36% of Americans would consider “strategic default”—another term for walking away from your mortgage—if they were underwater (owed more on their home than what it was worth).
Now that more than one in four American homeowners is “underwater,” I feel that it’s important for the community to know the truth about strategic default.
The truth is the foreclosure process carries with it credit issues, current and future employment challenges, issues with security clearance and possible debt collections.
That’s why it is vital to explain the 3 reasons why the term “strategic default” is misleading:
- There’s nothing strategic about defaulting on purpose, especially when you have options like short sales, mortgage modifications, and refinance (just to name a few) that may keep you from foreclosure.
- The waiting periods to apply for a new mortgage loan are at least five years less in a short sale vs. a foreclosure.
- A foreclosure will show up on your credit report every time you apply for a home loan, car loan, new job, etc., and will affect your financial situation for many years to come.
Luckily, we are experiencing less foreclosures in Washtenaw County in 2012. There are 177 homes in our Ann Arbor Area Board that are foreclousres and or short sales today.
If you are under water and can no longer afford your mortgage payments, you need to create a genuine strategy to avoid foreclosure, helping to provide stability for you and our community. You may be eligible for a Short Sale.
If you have any questions about what steps you or someone you care about should take next, contact us today! 734-426-6669
Kathy Toth, CDPE
Gunther Gardens is steeped in local history. The area was originally owned by the Gunther Family, German Immigrants in the early 20th Century who developed a thriving botanical and landscaping business as well as numerous other businesses. They were hit by the Great Depression and lost everything, the land however remained lush and the plants and trees teemed with life. In the early 1990’s the land was purchased by a developer and this small subdivision of high end luxury homes was developed.
How about this! Breconshire in Saline, Michigan, a great newer single family home neighborhood in a fantastic location! Breconshire neighborhood is a conveniently located newer subdivision of luxurious single family homes properties off of Saline Waterworks Road by N. Ann Arbor Street in the City of Saline, Michigan.
