Over half a million borrowers walked away from their mortgage in 2008. This represents twice the number in 2007. One bank states that one in five borrowers defaults willingly, even if they are able to afford the mortgage payment. Borrowers are looking at their homes as if it were a business and realizing that it doesn’t make financial sense to keep paying the mortgage on their home. As more and more people strategically default on their home, foreclosures will remain abundant. The Mortgage Bankers Assn. said that it expected home foreclosures to continue to rise before leveling off late next year. The continued rise of unemployment in California is also contributing to the increase of foreclosures. Loan modification have been hard to come by as the government has put many restrictions on them. Also people that acquired loan modifications are defaulting on them at an alarming rate because they are not reducing principle. Sure you get a lower interest rate but you still owe more than your home is worth. Many people owe staggering amounts to what their home is worth and realize that home prices will not increase to that level for many years to come. Borrowers are then left contemplating making payments on a bad investment. Most of these homeowners are just foreclosing on their properties and moving on. A better exit strategy that should be considered is a short sale. This will not damage your credit as much as foreclosure and will leave you in a position to buy a house in a year of two. Please contact us at www.california-shortsale.com for a free evaluation of your mortgage situation.

Post by California Short Sale Solutions from California Short Sale Solutions