Rapper Chamillionaire Strategically Defaults

June 4, 2010 No Comments »

walk away

These days, many homeowners need to make tough decisions when it comes to staying or going, what with all the underwater mortgages out there.

For rapper Chamillionaire, the decision seemed to come easy.

He told the notorious TMZ cameras that his 7,583 square foot mansion in Houston, Texas was a losing endeavor, and that he simply chose to walk away.

He purchased the home back in 2006 (a pretty terrible time to buy) for about $2 million, but saw the property value fall as the mortgage crisis rolled in.

And with no hope of an immediate turnaround, it seemed like the best decision for the rapper was “to let that house go.”

Besides, he’s always on tour – he mentioned going to Kosovo in the near future, and he’s got plenty of other properties to fall back on.

Of course, Chamillionaire played down the severity of the situation, telling TMZ, “when I’m Chathousandaire, then y’all have a real story.”

Strategic default reportedly accounted for 31 percent of the foreclosures in the first quarter of 2010, according to the Chicago Booth/Kellogg School Financial Trust Index.

And it seems to be becoming more of the norm these days, as the stigma of foreclosure continues to wane.

Still, 59 percent of homeowners still say they wouldn’t walk away no matter how deeply underwater they were.

Tip: Can you refinance with negative equity?

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