Tuesday, May 11, 2010

Strategic Default Video Goes Viral...Will Actual "Walking Away" Get Contagious, too?

While one local media source was suggesting now is the time to buy a house, the widely-read RE blog RealCentralVA focussed on mortgage holders who want to bail on the debt they're renting. 

A "strategic default" occurs when a mortgage holder lets the property go into foreclosure even though the debtor can still afford the payments, typically when the value of the property has declined so much that continuing to make payments is financially stupid.  The debtor can't get a mortgage mod because they are otherwise financially sound.

On Sunday, May 9, CBS news' 60 Minutes aired a segment on Strategic Default, which has now gone viral.

Background to the problem: 

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