This question may have crossed your mind if you’ve heard or read about the number of homeowners choosing to stop paying their mortgages. However, if you have a friend or family member in this situation you may have a different point of view. According to a FICO study, Boston real estate owners and homeowners across the country that walk away from their properties typically have good credit and are finance savvy. You may be rereading that last sentence wondering how that could be true. FICO stated, “As a group, strategic defaulters tend to be more savvy managers of their credit than the general population, with higher FICO® Scores, lower revolving balances, fewer instances of exceeding limits on their credit cards and lower retail credit card usage.
This indicates that strategic defaulters display a different type of credit behavior than distressed consumers who miss payments.” It seems that strategic Boston real estate defaulters often open new lines of credit and get as much cash as they can from them before the line of credit is cut. What’s happening, according to FICO, is that these groups of defaulters have seen such incredible declines in the value of their Boston real estate that they determine that it no longer makes sense to pay. What do you think of the Boston real estate owners that walk away from their mortgages?
Does the fact that some of them were pressured into high-priced mortgages they simply couldn’t afford affect your opinion? What about the owners whose Boston real estate values have declined so much that their mortgages are severely upside down? If you are in the market to purchase condos, apartments, or Boston real estate make sure you use a Boston real estate agent you can trust. One that will guide you towards making a responsible and wise purchasing decision so that you don’t find yourself in this situation.