The national news media has given considerable coverage to Strategic Foreclosures.
The New Yorker magazine ran a story in December, 2011, wondering why more private individuals don’t do strategic foreclosures. “… Sometimes the hypocrisy is staggering: last winter, the Mortgage Bankers Association—the very body whose president attacked defaulters for betraying their families and their communities—got its creditors to let it do a short sale of its headquarters, dumping it for thirty-four million dollars less than the value of the building’s mortgage.”
CBS News Money Watch did a story on February 16, 2010 about strategic foreclosure. In that segment, expert Jill Schlesinger says that persons more than 20% underwater in their mortgages should (at least) consider a strategic foreclosure. With 4.5 million mortgages below water at the time of the broadcast, this is a very large number. For these families, such a move may be the “most prudent thing to do” in anticipation of a sunnier future. While Ms. Schlesinger says that a strategic foreclosure will “wreck your credit for seven years,” many experts say that the impact is far less severe.
National Public Radio did a story April 5, 2010, about the government’s anti-foreclosure program(s). This program, in all its variations, has not shown itself to be particularly successful. You can listen to the National Public Radio reporter’s story here.
On Reddit.com there was an “I Am A” discussion with a California home owner who is underwater by about $140,000 and is preparing a strategic default.
CNNMoney reported in May, 2010, that the number of homes foreclosed in the previous month had reached an all-time high of 92,432, a pace of over one million per year. Experts anticipate that this number will remain about the same for months, perhaps years, to come as mortgage holders work through their lists of delinquent accounts.
Bloomberg: Home seizures in April, 2010, reach record high, foreclosure filings dropped
Marketplace carried a story on June 24, 2010, indicating that Fannie Mae was going to begin tightening the rules to discourage strategic foreclosures. Quoting from the transcript: Well they’ll begin “locking out” these borrowers from getting new mortgages for seven years. They’ll also go after strategic defaulters for the money they owe in states where that’s allowed.
This American Life (thisamericanlife.org) devoted a full one hour of programming on November 5-10, 2010 to toxic assets, foreclosures and strategic defaults. A discussion of the moral and ethical issues begins 20 minutes into the program.