Posts Tagged ‘credit report’

28
Oct

Strategic Mortgage Defaults Study Statistics

Posted by Sara M. Varese

According to a study by the Financial Trust Index, the likelihood of a homeowner walking away from their home and mortgage when they can still afford it, increases when the loan amount is significantly more than the home value or if many neighbors are walking away.    In addition, the study found the following:

-          If a homeowner could still afford the mortgage, that no one in the study would default if the equity shortfall is less than 10% of the value of the house. However, 17% of the homeowners would default if the equity shortfall reaches 50% of the value of the house.

-          Eighty percent of the study participants found strategic mortgages morally wrong.

-          Homeowners who had purchased their homes 5 or more years ago were 80% less likely to consider a default strategically than more recent purchasers.

-          Although they may think it is wrong, homeowners are more likely to admit to default when the surrounding area is known to do so.

-          Defaults are considered less morally wrong in the Northeast and the West.

In addition, the following are foreclosure facts that consumers should be aware of:

-          Foreclosures lowers credit scores by at least 100 points.

-          Foreclosures stays on credit reports for 7 years.

-          A foreclosure on a credit report makes it very difficult to obtain a personal or car loan.

This study statistic summary was provided by Pay1Day.com, a company specializing in providing immediate cash assistance for consumer immediate financial needs.

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