I was talking with one of my top investor clients a couple days ago and he mentioned he "walked away" (aka foreclosed) from two investment properties last month. The two properties - both Atlanta condos - had lost a combined $250,000 in value over the last 18 months. Meanwhile, the bank holding the note refused to entertain 3 bonafied short sale offers, denied application to modify the adjustable rate mortgage and increased his monthly interest payment $600 a month.
Foreclosing on Your Atlanta Home: A Strategic Approach
For a professional real estate investor who makes his living creating profit in the homes he buys and sells, it was a smart decision. A strategic one, really. Either continue to hemhorage massive amounts of money every month paying interest on a loan financing a sinking ship or simply stop making payments altogether. But what about the milliions of homeowners stuck in the same debt prison? A RECENT study suggests that most homeowners have reservations about "walking away" from a mortgage that they can afford to pay, even if it ties them down to an investment that’s unlikely to pay off anytime soon.
But if the property has lost significant value, or if many neighbors walk away from their mortgages, the study says, “strategic defaults” are a very real part of today's real estate landscape.