Default occurs when a homeowner
falls behind on mortgage payments. This can be due
to a hardship, which can include (but isn't limited
to) job loss, divorce, medical bills, or a monthly
income shortfall. Due to current economic conditions,
literally millions of homeowners across the country
have found themselves in default situations. For
homeowners in default, programs have been initiated
through the administration and lending institutions
to provide solutions and to salvage financial futures.
In a "strategic Default,"
the homeowner simply chooses to "walk away"
from the mortgage - in other words, move out and
stop paying - even though they may be able to make
the payments. This is often doen when the homeowner
owes more on the home than it's worth, and views
the home as a bad investment. However, most of these
homeowners don't understand that walking away from
the mortgage will expose them to foreclosure, credit
issues, current and future employment challenges,
and possible debt collections.
If you are underwater on your
mortgage or behind on your payments, you need to
know that there is time to analyze your options
before foreclosure happens. More importantly, there
are alternatives that will protect your credit and
Mortgage lenders are looking
to avoid the foreclosure process just as much as
homeowners. While they are not in the real estate
business, some have instituted further options to
help homeowners avoid foreclosure.