The Dangers In Just Walking Away

Strategic defaults are the topic of this article, which describes how the historically unfavorable practice has become more accepted by homeowners with toxic mortgages. This change in perception has much to do with the public’s opinion of the banking industry and its irresponsible practices over the past decade. However, although many homeowners believe the process of strategic default will be simple, it is not. One important factor is that the rules related to this practice differ from state to state, and in some states, going forth with a strategic default can come back to haunt the homeowner. This article highlights various dangers associated with strategic defaults, such as homeowners being sued by insurers or the mortgage debt being counted as taxable income. The article also provides insight on other options for homeowners such as loan modification or short sales.

SOURCE: Banktime.com, 3/16/11

URL: http://banktime.com/mortgage/the-dangers-in-just-walking-away/2143/