Strategic Default Hurts Chances for Future Mortgage
Walking away from a home loan could make it more difficult to get a mortgage in the future.
States like Nevada, California and Arizona have posted some of the highest rates of people facing problems with their home loans.
However, some consumers may actually opt to not stop foreclosure, especially in light of home values decreasing. Many people have found themselves underwater, meaning they owe more on their home loan than the property is worth.
As a result, some consumers have opted to walk away. Although their credit scores will take a hit, these consumers may feel they can rebuild them over a few years of handling their finances properly.
However, a recent report from CNNMoney.com noted that lenders are paying attention to more than just credit scores when granting mortgages. A homeowner who wasn't in dire need yet still faced a foreclosure could raise a red flag for financial institutions.
"If you made a strategic decision to default on paying your mortgage, it will work against you," the National Association of Review Appraisers and Mortgage Underwriters' Bill Merrell told the news organization.
According to RealtyTrac, Nevada has posted the highest foreclosure rate in the country for 40 straight months.
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