Posted On: June 18, 2010
Those Who Opt for Strategic Default May Not Be Able to Own Home Again for 7-8 Years
If you are seriously underwater on your mortgage and make a strategic financial decision to just walk away and let your home fall into foreclosure, chances are that you will not be able to own another home for almost a decade, according to Jay Brinkmann, an economist with the Mortgage Bankers Association.Lending experts say that unless there was a solid financial reason for you to walk away – say, a job loss or a sudden spate of medical bills – the repaired credit score you may gain from being able to pay your other bills since you walked away from your mortgage will not help you when it comes time to qualify for a new home loan.
In an article on CNNMoney.com, Bill Merrell of the National Association of Review Appraisers and Mortgage Underwriters said, “If you made a strategic decision to default on paying your mortgage, it will work against you.”
Merrell said that banks will be far more lenient if the default resulted from circumstances beyond the borrower’s control. And if borrowers with a default in their past do get approved, it will likely be at a much higher interest rate.
If you are a Florida homeowner facing possible foreclosure and need to know about all your options, contact our Jacksonville, Florida foreclosure law firm.
Greg Gilbert
Keith Maynard
