30% of Americans Approve of Strategic Defaults

Hey D.C. Here,

I hope you had a great weekend. My weekend was pretty relaxing. Pretty much hung out by the pool with the family all weekend. With all the water slides and toys in the pool, my back yard almost looks like a Disney water park.

If you’ve never heard of a strategic default before, let me fill you in.

With housing woes capturing front-page headlines in the United States, the odds of distraught homeowners becoming even more frustrated and opting to abandon their mortgage obligations has become a growing concern within the industry.

Still-falling property values are pushing more homeowners underwater, and the social stigma attached to foreclosure is steadily eroding as delinquencies become almost commonplace – such factors can fuel the fire for so-called strategic defaults.

A survey by the Pew Research Center found that more than a third – 36 percent – of Americans believe the practice of “walking away” from their mortgage payments and their home is acceptable, at least under certain circumstances.

Of the nearly 3,000 people polled by Pew Research, almost six-in-ten, 59 percent, say it is wrong for homeowners to deliberately stop paying their mortgages and surrender their homes to the mortgage lender.

Two-in-ten, or 19 percent, feel it is “acceptable.” An additional 17 percent volunteered that it depends on the circumstances, an answer that wasn’t given as a choice in the survey, according to the nonprofit think tank.

Twenty-one percent of the survey respondents say they owe more on their mortgages than their home is worth. Their assessment is strikingly close to the latest estimates from CoreLogic, which finds that some 11 million borrowers, or 23 percent, are underwater. Analysts warn that the farther a homeowner falls underwater, the more likely they are to throw in the towel.

According to Pew Research, nearly half, 48 percent, of all homeowners say the value of their home declined during the recession. As a group, these individuals are more likely than those whose home did not lose value to say it’s acceptable to renege on a mortgage (20 percent vs. 14 percent, the survey found.)

Rich Morin, a Pew Research senior editor in Washington, says caught between big mortgages, sinking home values, and the financial strains associated with periods of high unemployment, many homeowners have stopped making their mortgage payments. They feel their best-case scenario is to bail, take a big credit hit, and lose their home.

Here’s where you come in as their solution provider.

Here are the facts:

They’ve already decided to walk away from the home so you offering them a short sale is the most favorable way for them to avoid destroying their credit altogether. A short sale does not hurt your credit as much as deed in lieu or a foreclosure. They save their credit the best they can and you make a big check for helping them out.

1 in 7 homes are either in foreclosure or behind on payments. There are more opportunities now than we’ve ever seen. 12% of all homeowners with mortgages $1M or more are delinquent which provides a multitude of opportunities for you as a real estate investor.

This financial crunch and foreclosure wave is not going to last forever. The more deals you do now, the more you can save for your retirement.

If you are not already a VIP+, Gold or Platinum VSSI member you need to be on this week’s webinar.

If you are a VIP member, you need to be on this training to see the incredible deal I have for by upgrading to VIP+.

You can register for it here:

http://www.dcfawcett.com/go

I’ll be teaching it personally and I’ll show you how you can partner with me and my team of negotiators so we can negotiate your short sales for you.

Negotiating short sales and trying to do everything yourself are 2 of the top 5 reasons why investors fail in the short sale business. I’ll show you how to avoid these mistakes and overcome them immediately Thursday night.

Sign up for Thursday’s complimentary training here:

Talk to you Thursday night,

DC

PS: We don’t have many spots left in our partnership program. Get in now while we still have a few openings. We are getting more deals from our partners than we ever have because there are so many deals out there. I believe you deserve to get your piece of the pie, don’t you?

If you are a GOLD or a PLATINUM member, you need to be on the GOLD coaching call Thursday night where my coaches take your questions live on the phone.

Related Real Estate Investing posts:

1. Commercial Mortgage Defaults- Highest rate since 1992
2. How to Craft Your Personal Strategic Plan
3. Market Update: Commercial Loan Defaults Reach Record High
4. Foreclosure Investing:Look what’s coming in 2010 for foreclosures
5. Commercial Foreclosures $1.4 trillion in commercial mortgages coming due are underwater