How Strategic Mortgage Defaults Will Effect the Selling of Your Home.....

Strategic Mortgage Default occurs when a homeowner, finding his home worth less than he owes on his mortgage, intentionally allows it to go into foreclosure. That is intentionally. Whatever your feelings on the morality of this issue, many people have and are doing it. And even, many more are considering it. You've probably heard or read about this tactic. The thinking, typically, is that throwing good money after bad will just lead to ... nothing. Many people believe that their homes are never going to be worth what they paid for them. Their thinking is “ No more property taxes, maintenance, insurance? Sounds good to me!” (Never mind tax and other implications).

In 2010, based on when many parts of California saw their real estate markets “top out”, many homeowners will have adjustments in their mortgages kick in. One positive aspect of this might be that interest rates are quite low, so payments may not change all that much. But these adjustments, coupled with new taxes just passed in the state and the realization that their homes aren’t worth close to what they paid might be enough to have many people calling it quits.

While all of this might sound daunting, it would be naive to not face the reality of the situation head-on. Strategic Mortgage Default will do its part to drastically raise the number of bank-owned for sale in California. And there are many already.

If you’re planning on selling your house this year, these homes -- part of what we call “shadow inventory”-along with short sales -- could play a big role in where you can, realistically, set your price. If you’re planning on buying, you’ll want to know how to position yourself to get the best price possible on your purchase.
Strategic Mortgage Default is going to be something you’ll hear more and more about in 2010.

Contact me for more information on making one of the most important decisions of your life.

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