Karen Arbutine & Associates

Details on Strategic Default

Fri, Oct 21, 2011 at 3:58PM

Approximately 17 percent of Americans who defaulted on their
mortgages in the second quarter rof 2010 did it though a strategic default.  What is a strategic default?  It is when the owners of an asset choose to
stop paying on your mortgage even if you can afford the monthly payments.  If you owe more on your home than its current
value, you may feel tempted to walk away from a bad investment, even if you can
afford to make the monthly mortgage payments.


If you are planning on a default keep these items in mind
prior to doing so.


a.  If you default on
your mortgage it is the second most damaging thing you can do to your credit. 


b.  Employers are
looking at credit reports.  National fact
is 60 percent now check applicants credit according to Washington Times. 


c.  Fannie Mae is
implementing a policy to prohibit strategic defaulter from getting a new
mortgage through Fannie Maie.


d.  Lastly the debt
you feel you are erasing may be recorded as income which you may have to pay
taxes on.

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