What kind of homeowners choose to default?

Underwater homeownersI know this sounds a lot like my last post, but it is different enough that it is worth reading.  More and more homeowners who are borderline hardship cases are opting to put their homes on the market so that the bank will consider the offer they receive and negotiate a short sale with them.  Here is what Kenneth Harney has to say about this:

People who walk away from their mortgages are not as calculating as you’d think, says Brent T. White. Memo to the bank: Take this underwater, money-gulping house and go ahead and wreck my credit for years to come. I’m walking away no matter what.  Why? That’s the provocative question posed by Brent T. White, a University of Arizona law professor whose academic paper on the fast-spreading “strategic default” phenomenon last year drew sharp criticism from lenders and Wall Street, who viewed him as the Pied Piper of the walk-away movement.  Read more:

http://www.latimes.com/business/la-fi-harney-20100523,0,2614547,print.story

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