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THURSDAY, NOVEMBER 26, 2009
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A Quarter of Defaulters Are Doing It on Purpose

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(Newser) – As many as 26% of mortgage defaults are deliberate moves by homeowners who owe more than their house is worth, finds a new study that asked 1000 people if they knew anyone who had defaulted even though they could still make payments. Researchers caution that the study isn’t precise, but the findings point to a flaw in the Obama administration’s approach to the housing problem, which has focused on whether mortgage holders can afford their monthly payments—not whether they want to.

“They can still afford to pay, but they decide not to,” says one of the authors, and get away with it because of the high cost of going after borrowers in default. “It’s very easy to do this in the US.”

In this March 24, 2009 file photo, a sign lies on the ground in front of a foreclosed home in Homestead, Fla.
In this March 24, 2009 file photo, a sign lies on the ground in front of a foreclosed home in Homestead, Fla.   (AP Photo/J Pat Carter, File)
In this Feb. 17, 2009 file photo, a foreclosure sign sits outside a home for sale in Phoenix.
In this Feb. 17, 2009 file photo, a foreclosure sign sits outside a home for sale in Phoenix.   (AP Photo/Ross D. Franklin, File)
In this file photograph taken Feb. 23, 3009, a foreclosure sign blows in the wind in front of a home under foreclosure in Antioch, Calif.
In this file photograph taken Feb. 23, 3009, a foreclosure sign blows in the wind in front of a home under foreclosure in Antioch, Calif.   (AP Photo/Paul Sakuma, File)
In this March 15, 2008 file photo, a realtor's sign is seen on the lawn of a foreclosed home in Egg Harbor Township, N.J.
In this March 15, 2008 file photo, a realtor's sign is seen on the lawn of a foreclosed home in Egg Harbor Township, N.J.   (AP Photo/Mel Evans, file)
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18 comments
VIEWING:
 
Nwambe
Jul 8, 09 9:53 AM CDT
So wait, wait, when bankers do it, it's an isolated problem, but when people decide to play the system, it's a systemic issue? Naw, that's not fair. The banks screwed you guys over, you're allowed to screw them back. Reply
Vote up! Vote down!
+16
IN RESPONSE:
GDizzle
Jul 8, 09 11:46 AM CDT
You know what they can take my house...lost 100k in value and they wont even let me refinance. No loan modifications or anything because I am not behind on any payments...I am so over it!
Vote up! Vote down!
+6
carol
Jul 8, 09 9:55 AM CDT
Yep, afraid this would start happening. Our new govt policy has made it easy for those not willing to work hard just to put their faith in the govt taking care of them. Lazy "good for nothings" will always find a loophole and this new administration is making it easier. Reply
Vote up! Vote down!
-8
IN RESPONSE:
NewserHound
Jul 8, 09 10:19 AM CDT
Hey now I work more than full time and the condo I bought just a few years ago is now worth six figures less. The neighborhood didn't change. I am supposed to take the hit for a bank error in investing? Considering defaulting myself as my house may never be worth what I paid for it. This makes me lazy? I LOST MY DOWN PAYMENT and MORE! Think outside your little box please.
Vote up! Vote down!
+11
IN RESPONSE:
Fondue
Jul 8, 09 10:27 AM CDT
And it's always Obama's fault.
Vote up! Vote down!
+11

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