What’s up webfolk? The last time I posted here for the real estate blog I was writing about the housing market woes and seeing how there are so many things contributing to this downward spiral I figured I could break that up into a couple of posts. So let’s just jump right into it with a relatively old but now becoming popular unfortunately called strategic mortgage defaulting.
This is happening alot now in the last couple of years because the value of homes has dropped so much that home owners that can actually afford to make their mortgage payments are choosing not to becuase their loan is way underwater. Which means it’s in their best financial interest to cut their losses and just walk away which of course just adds to the foreclosure mess. OH joy right? Yes this is a thing and there are alot of people doing it right now, on the one hand I get it. Why continue to pay down your mortgage on a house that will probably not regain the value it had when you purchased it for maybe 10 more years if we are lucky.
House flipping is great in theory but now that the banks and mortgage lenders are so strict on their loans now the amount of potential flippers has all but dried up. That plus the fact that there are still home builders out there that are still building in certain pockets of the country is not helping the over all number of unsold inventory homes on the market. Basically there are way to many homes on the market for the amount of people that would now qualify for a mortgage according to the new stricter guide lines that lenders must follow.
All that plus there are some estimates out there right now that about 11 million of the more than 55 million active mortagages that are out there right now will be in danger of defaulting in the next five years. I won’t even go in to the very shaky ground we are on when it comes to the job market. I did not cover all the factors contributing to housing markets troubles but these are the one’s that seem to me at least are the biggest thorns in the side of any possible recovery that we may see.
Until the next time kudos to you peruser 
Dave
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