“Why would I keep paying on a $250,000 loan?” he asked. “I would not ever buy a house again.” (We tried to follow up with this guy, but his number had been disconnected.)
Statistics don’t exist because no one declares their reasons for walking away, but a handful of papers have suggested that there’s something to the anecdotal reports about borrowers “strategically” defaulting on their mortgages.
A top industry consultant suggested today during a meeting with Developments that such defaults may be more common with the younger set (under 30) that didn’t grow up with the pay-your-mortgage-before-everything-else mentality. This generation is more likely to view owning simply as an investment, says John Burns, president of John Burns Real Estate Consulting. Culturally, “it’s more acceptable than it was” during previous downturns, he says.
Read more from the Wall Street Journal
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Good for them! I had the same “pay your mortgage before anything else” mentality before the housing market took a huge dump.
Now, with homeowners so upsidedown to the point where most won’t be in a positive equity situation for 10-15 years, it makes more sense financially to just walk away.