While many home owners continue to wrestle with the fallout of the housing crisis, a majority of Americans say that simply walking away from a mortgage shouldn’t be an option for home owners, according to a new survey by FindLaw.com.
Some home owners facing potential foreclosures or being “underwater” on their mortgages (meaning they owe more on the loan than the house is currently worth) have simply been walking away from their mortgages and refusing to make the required monthly payments. There are no reliable figures on how many home owners have chosen to take this path, sometimes referred to as a “strategic default.”
The majority of Americans—60%—believe that it is “never OK” for home owners to simply stop making payments on their mortgages. One-third of the population (34%) says it’s OK for home owners to walk away from mortgages, but only if they aren’t able to make the monthly payments. Only 3% believe that home owners should be able to walk away from mortgages anytime they want, the Findlaw.com survey said.
“Many home owners are currently facing very difficult and complicated situations involving their home mortgage, in some cases even including the threat of foreclosure,” said Stephanie Rahlfs, an attorney and editor for FindLaw.com. “But before making any major decisions, home owners should consult with financial and legal professionals, including accountants, real estate attorneys, and financial advisers. Any major change to a mortgage situation could lead to serious and unanticipated consequences involving taxes, contract law, credit scores, ability to borrow in the future, potential for lawsuits, and much more.”
Free online resources such as the FindLaw Real Estate Center (realestate.findlaw.com) can provide helpful information on mortgages, foreclosure, and the legal implications of real estate decisions, as well as help finding a local attorney who specializes in real estate law.
The FindLaw survey was conducted using a telephone survey of a demographically balanced sample of 1,000 American adults and has a margin of error of plus-or-minus 3%.