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All underwater homeowners eventually come to a crossroads: Either continue funelling money into a home that costs more than it’s worth or strategically default –– ending their payments and waiting for the lender to foreclose.Turns out 68 million U.S. adults wouldn’t mind taking the latter route, according to a new survey.
Of more than 1,000 consumers questioned by research firm JZ Analytics, 32 per cent said they think people should be able to walk away from their mortgage. Thirteen per cent said they would do it themselves if necessary, and 17 per cent said they know someone who’s done just that.
It makes sense. The foreclosure process can take as many as two years –– or longer, in areas hit hardest by the housing crisis –– leaving consumers to live mortgage-free while they wait for lenders to take back their homes.
“A large number of Americans who are underwater on their mortgages would be better off financially if they walked away from their homes,” Brent White, a University of Arizona real estate expert, told Business Insider in a past interview.
“They don’t because we have a double standard … individuals are told they have a moral obligation to pay their mortgages and corporations understand that contracts are to be breached when it’s not economically efficient.”
Strategic defaults may put credit scores in jeopardy (by some estimates, a 100-point loss or greater) but consumers seem less concerned with their “numbers” these days.
More than one-third of respondents said poor credit is “socially acceptable” and 17 per cent said they wouldn’t mind exaggerating their financial health to get new credit.