A shock poll from mortgage financier Fannie Mae revealed nearly nine in 10 Americans believe it’s unacceptable to stop making payments on an underwater mortgage.
That includes seven in 10 who are currently delinquent on their own mortgages, which is pretty interesting.
However, 15 percent said financial distress would make stopping mortgage payments on an underwater mortgage acceptable.
And both delinquent and current borrowers are more than twice as likely to seriously consider stopping their payments if they know someone else who has defaulted.
So it sounds like a lot of respondents may be dodging the truth, or at least giving the standard “I wouldn’t do it” survey response.
Because if you look at the data, it’s not quite lining up with the survey, which might be the problem with surveys…
But it seems as if everyone would consider strategic default if the proverbial seal was broken, whether that’s their neighbor defaulting first or another trusted party endorsing it.
After all, it is believed that more than a quarter of mortgage defaults are strategic, especially when negative equity exceeds the magic threshold of 15 percent.
It’s perhaps at that point that borrowers feel it’s a bridge too far to get back above water and keep paying the mortgage.
The survey, conducted between December 12th and January 12th, was based on responses from 3,451 Americans aged 18 and older.
Respondents included current homeowners, mortgage borrowers, renters, and hundreds of underwater borrowers.
It’d be interesting to get a better breakdown of who said what since a renter might not be the best person to ask.
It included questions related to housing, the economy, renting, challenges facing homeowners, and more.
Nearly two-thirds think it’s a good time to buy a house, and 31 percent think it’s a very good time to buy, matching sentiment seen in 2003 before the bubble grew out of control.
So despite the very recent housing crisis, it seems many folks are ready to get back into the market.