SEATTLE NEWS ARCHIVES & FEATURES
Walking away from mortgage more ‘socially acceptable’
Jul 30, 2012, 8:46 AM | Updated: Mar 4, 2016, 5:55 am
Forty-five percent of Nevada homeowners recently surveyed say "there is nothing wrong" with walking away on your mortgage obligations. (AP Photo)
(AP Photo)
It’s becoming more socially acceptable to walk away from your mortgage, according to a new report from the state leading the nation in foreclosures.
Forty-five percent of Nevada homeowners recently surveyed say “there is nothing wrong” with walking away on your mortgage obligations, according to the study, “Face of Foreclosure.”
The report, released by the Nevada Association of Realtors, showed an equal number of homeowners said they had a “legal and ethical obligation to pay their mortgage if they can.”
The number of homeowners who find “strategic default” socially acceptable is growing in the state, which has consistently had one of the highest foreclosure rates in the country the last few years. In 2011, 23 percent of Nevada homeowners who lost their home to foreclosure said they walked away from their mortgage.
In 2012, 27 percent of foreclosed homeowners say they strategically defaulted on their mortgage.
Strategic default is when a homeowner is financially able to make their mortgage payments but decides to stop, usually because the property is underwater.
“This year’s report shows it’s more socially acceptable to strategically default on your mortgage,” says Blane Johnson, NVAR’s president. “I hope banks and government leaders will look at this to help them get ahead of these issues.”
For those who decided to walk away from their mortgage, 40 percent said they had been advised by their lender or financial adviser to stop paying their mortgage so that they could qualify for more assistance with their home loan.
