A Quarter of Defaulters Are Doing It on Purpose

By Kevin Spak,  Newser Staff
Posted Jul 8, 2009 9:36 AM CDT
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)
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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.”