How Can I Walk Away from My Mortgage?
Posted By Chris Forrest on Aug 26, 2010 3:59pm PDT
A strategic default begins with a decision by a homeowner to stop making payments on a mortgage. With the help of an experienced foreclosure defense lawyer, a strategic solution can be an excellent solution to a serious financial problem.
The most common reason for a strategic default is that the value of the property has dropped below the amount owed on the mortgage. This is referred to as “negative equity” or being “underwater.” Faced with negative equity, many homeowners rationally conclude that they will be better off financially in the long run if they choose to walk away from their mortgage.
The decision to strategically default is often also influenced by other financial considerations including loss a job, reduction in income or the need to move to a different city or state. Owners of rental properties often consider a strategic default when it becomes difficult to rent the property or the rental income is no longer sufficient to generate a positive monthly cash flow.
Mortgage payments may also be draining other financial resources. Unemployed homeowners tap into their retirement plans to make mortgage payments. Savings accounts are wiped out as homeowners try to keep their heads above water.
It is estimated that over 1 million homeowners who could afford to pay their home loans will walk away from their mortgages this year alone. The term strategic default has become part of our common vocabulary and the concept has been the subject of television specials, newspaper articles, and academic study. In Arizona, more than 50% of all houses are underwater. In Nevada, it’s even worse: 65% of houses have negative equity. Though most severe in Arizona, California, Florida, Michigan and Nevada, negative equity is a nationwide problem. Across the country, more than 16 million homeowners are now underwater. Many leading economists predict that the housing crash will continue to worsen, perhaps for many years, before it ever stabilizes. This is a crisis of unprecedented magnitude.
Once considered taboo, choosing to default on a debt has become increasingly more common and more acceptable, particularly as America consumers become increasingly aware that banks and lenders are not taking steps to help families and property owners keep their homes. Anyone who has attempted to apply for a mortgage modification or conduct a short sale knows how difficult it is to deal with most banks and loan servicers.
More Americans are becoming angry that these banks have taken billions of dollars in taxpayer bailouts, and then have used that money to forcibly remove hundreds of thousands of Americans from their homes. Many families have come to the realization that there will be no bailouts for the American homeowner struggling to make mortgage payments. No one is coming to save them. They feel abandoned by their banks and by their government.
If you feel this way, you are not alone. And you are right.
I have spent years defending American homeowners in a war being waged against them by banks and financial institutions. The courtrooms of America have become the battleground in this war. The American homeowner is losing.
But you have the means to fight back. You have the ability to unshackle yourself and walk away.
The time has come to recognize that we no longer live in the America of our youth. The American dream, if it ever truly existed, has been forever changed. To survive in these new times, in this “new normal,” you must come to the realization that since no one is coming to help you, you must help yourself. You must take stock of your financial situation and your future. You must put yourself and your family first. You must decide what is in your best interest, and then let nothing stand in your way. Stop listening to banks and loan servicers trying to shame you into continuing to pay on a toxic mortgage. Stop looking to elected officials to offer you a way out.
You must seize control of your life and make decisions that are best for you. I will give you the information you need to make an informed decision about your financial future. The Forrest Law Firm can help you regain control of your financial future.