Bookmark this site
The collapse of the housing market has pushed more than 11 million homeowners into the uncomfortable position of owing more to their lender than their house is worth. A third of the mortgages held in California fall into this category, according to housing market analyst CoreLogic. Many of these borrowers are voluntarily defaulting on loans even though they could still afford their payments, calculating that their homes will never regain their value.
During debate last week on a bill (HR 5072) to shore up the Federal Housing Administration’s mortgage insurance program, the House decided to crack down on such “strategic defaults.” Lawmakers agreed to a proposal by Rep. Christopher Lee (R-N.Y.) to make those who strategically default ineligible for new FHA-insured loans. The ban sends the right message, but it’s not likely to make much of a difference to the borrowers mailing in their keys.
Read more from the LA Times
