American Dream 2.0: Default and then Rent

On December 13, 2009, in Common Sense, Real Estate Law, by David C. Winton

May 11, 2010 UPDATE since original post:   60 Minutes with Morley Safer did a piece on Strategic Defaults on May 9, 2010 that you may want to check out.

The Wall Street Journal has been running some interesting guest editorials lately–interesting that is for the venerable WSJ–on the voluntary and “strategic” choice of homeowners who are not forcerd out of their homes by unemployment, medical emergencies, or other family troubles, but who are leaving by choice because they’d rather not spend the rest of their lives paying for a house that’s no longer worth what they owe.  The most recent is called “American Dream 2: Default and then Rent.”  The point seems to be that mere shame–overlaid with a banker’s version of economic morality–just isn’t enough justification to keep paying for something that has no value.

 


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