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While many of these 4 million homeowners really can’t afford to stay in their homes, there’s an emerging group who are making a strategic decision to walk away from their homes. It’s hard to pinpoint the numbers but lawyers for mortgage companies are reporting increased incidence of strategic foreclosures.
Bankruptcy lawyers say that if homeowners are more than 20% under water, it may make more sense to walk away in order to improve cash flow. In many parts of the country, the monthly nut to carry the loan is often 2-3 times the comparable rent in the neighborhood. Homeowners are making the calculation that losing their down payments may be better than waiting 5-10 years to get their heads above water.
Read more from the CBS News
