Strategic Defaults are the Next Big Wave
One of my lead sources are Mortgage Advisors and Brokers and they are calling me all the time telling me about a homeowner that called to try to refinance. The borrower is looking for a rate term refinance with good credit scores, excellent debt to income ratios, no late mortgage payments and a steady work history. That is an A Paper Loan we dream about all day so why can’t they get him approved – because his loan to value is too high. Yup, he is upside down and through no fault of his own. Housing prices in his neighbor have fallen do to scattered foreclosure in his area and they can’t get the value they need in the appraisal. Thousands if not millions of homeowners are stuck in upside down mortgages and they are not happy. You have the family that bought their house two years ago and put 20% down to help reduce the mortgage payment and get a better interest rate. That money is gone, the little equity they had is gone and in some cases so is the homeowner. In 2007 the sub-pri...