When the housing bubble burst and the economy began its nose-dive, this country saw a huge leap in the number of folks defaulting on their loans and a serious rise in home foreclosures.
A lot of people took flak for walking away from their mortgage payments; they were called irresponsible, bad role models for their children and even un-American. So it is with a cautious hand that I write about the website StrategicDefault.org, a resource for those who would walk away from mortgage loan payments, credit card payments, business payments and the like.
I do see a line between those who simply cannot pay and those who don’t want to. Naturally my sympathies lie with the former. Be that as it may, the strategic default is, by accepted definition, when a property owner (though it also applies to credit cards, business loans, etc.) chooses to walk away from the mortgage loan payments even when he can still make the payments. Why would a person do this? Perhaps the loan is draining the savings account or the property is so “underwater” that there is no hope of gaining equity. Some like to throw out the word “fraud” to blanket this practice, but I think that’s ignoring the wide spectrum of home owners who have chosen (or will choose) this option. There are plenty of responsible, law-abiding citizens out there who borrowed responsibly and fell victim to a horrible economic downturn. I believe such folks deserve a chance to keep both their personal finances and integrity intact.
And so, I encourage readers to check out the StrategicDefault.org website, to educate if for nothing else.
Got an opinion on the strategic default practice? Comment below.