Interesting Miami Herald look at the rising trend of strategic defaults in Florida. Thanks to the eroding “social stigma of foreclosure,” such purely economic/business decisions (as opposed to moral or ethical choices) are increasing.
Some of the Herald’s Florida data points are amazing:
• Property values have plummeted by an average of 50%
• In Q4 2008, strategic defaults were 28% of defaults (Miami-Dade and Broward Counties)
• Same locations, Q4 2006: Strategic defaults were 20%;
• In September ’09, homeowners owed $62.7 billion more than their homes were worth (CoreLogic)
• Broward County 2006 purchases had a median negative equity = $75,000
• Miami-Dade 2006 purchases had a median negative equity = $63,000,
• Nationally, estimated 588,000 strategically defaulted in 2008 (Experian)
• Strategic defaulters with good credit scores (who remain current on other credit lines) can rehabilitate their FICO scores within 24 months after foreclosure.
Fascinating stuff . . .
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Source:
Homeowners walking away from underwater mortgages
MONICA HATCHER
Miami Herald, 10.24.09
http://www.miamiherald.com/251/story/1298873.html
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