"It's increasingly a more important factor driving the foreclosure crisis," Moody's Mark Zandi...

"It's increasingly a more important factor driving the foreclosure crisis," Moody's Mark Zandi says of the growing uptrend in walkaways, also known as strategic defaults and voluntary foreclosures. According to Citigroup's (C) mortgage unit, one in five borrowers who defaults is able to pay his mortgage.
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Comments (6)
  • Papaswamp
    , contributor
    Comments (2241) | Send Message
    But wait I thought the recession was over......
    3 Nov 2009, 12:15 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6879) | Send Message
    Moral hazard: If you offer relief to those who truly can't pay, you also have to accept non-repayments from those who can, but don't have an economic incentive to do so because they are "underwater."


    The only antidote is not to have bubbles and "underwater" housing in the first place. Raising the minimum down payment to 30% would be a good first step in solving both problems.
    3 Nov 2009, 12:21 PM Reply Like
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
    Another news piece from the core of GDP. This is what to focus on, not that Buffett bought a railroad. I trust the reality of the situation at hand to make my market decisions, and not the poorly timed investing moves of an "oracle" in Omaha
    3 Nov 2009, 12:25 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5202) | Send Message
    Of those 1 in 5, I wonder how many had skin in the game. I suspect many of them made substantial down payments. Every homeowner knows, that with financing, they will pay several 100% more than the cost of the home. The catalyst for that homeowner in Pennington referenced in this article was a job loss, not the fact that her home went down in price. It's important to separate the wheat from the chaff in these articles. This is not moral hazard. This is a homeowner that can't afford to throw good money after bad. There's a difference.
    Job losses trump all good intentions.
    3 Nov 2009, 12:38 PM Reply Like
  • Neil459
    , contributor
    Comments (2636) | Send Message
    When you have fee money, why not walk away. This is exactly why the government should not provide incentives for home purchases. But they insist in trying to fool the lower class into believing that the government will provide the same benefits as hard work. In reality it never works for long.
    3 Nov 2009, 01:01 PM Reply Like
  • bbro
    , contributor
    Comments (11227) | Send Message
    A strategic default of a mortgage is a takeaway from the Taxpayer....
    Teaparty anyone???
    3 Nov 2009, 02:50 PM Reply Like
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