Throughout 2008, approximately 588,000 mortgage holders made the decision to voluntarily walk away from their distressed homes. This was double the number from just the previous year. Economists predict that there will be many more in the future, and are concerned that these occurrences will hamper housing market recovery efforts.
Even though borrowers are able to pay on their mortgage, and remain current, Citigroup has reported that one in five chooses to default willingly.
Mark Zandi, with Moody's Economy.com reports that voluntary loan defaults are becoming a more serious factor in the driving of the overall foreclosure crisis. He states that in the future as the job market recovers and more people return to work, strategic defaults could become a larger issue. Home owners are going to sit down and make the determination as to whether or not it makes financial sense to remain in their homes. The growing issue of strategic defaulting could mean that the foreclosure crisis could be around for a long time.
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