When it comes to defaulting on a mortgage loan, most people look at this as a bad thing. In most cases, when someone in Royal Oak, or the surrounding area, defaults on a loan it’s because he or she doesn’t have the means to continue making his or her monthly payments. However, in recent years, some people are making the conscious choice to walk away from their mortgage debt, even though they still have enough income to continue making their payments. Why would anyone do such a thing? Doesn’t the prospect of going through foreclosure seem like a bad idea?
Royal Oak Law Firm Explains Strategic Default
While in most cases, home, or other property, owners do everything they can to avoid going through foreclosure and losing their home. In most situations, that makes a lot of sense and it’s usually the right path to follow. However, not every case is the same and some people find that choosing to walk away from their mortgage and having it foreclosed by their lender makes better business sense. It’s called a Strategic Default and many borrowers in recent years have found strategic default to be an effective way to get out from underneath a bad real estate investment.
Why Walking Away From Your Royal Oak Mortgage Could Be a Good Choice
The real estate market is constantly changing in the Royal Oak area, which means the values of property can constantly change as well. Sometimes, homeowners or investors can purchase a home or property when it’s valued high, only to see the value of that purchase drop over time. When you own a home or other property that continues to decrease in value and there doesn’t seem to be any sign of change, then it may just make more business sense to stop putting your hard-earned money into a sinking ship, so-to-speak. For example, if you owe $200,000 on a property that is now valued at only $125,000, then it might be better to foreclose on that property rather than to continue to throw money into it for years while you hold out hope that it will appreciate in value again.
Understanding all Sides of Strategic Default
Typically, strategic default implies that the borrower still has the ability to make his or her mortgage payment. However, that does not mean that strategic default comes without consequences for the borrower. There could still be some repercussions if a person makes this choice, including having to go through foreclosure and having that on his or her financial record. In any case, if you find yourself in this situation and you are looking for a way to get out from under a bad real estate investment, then a strategic default might be the right answer for you.
Contact Our Strategic Default Law Firm in Royal Oak
At the Law Office of John Little, PLLC, we understand the strategic default process and we can evaluate your individual case and help you see both the pros and cons of such a decision. We give you a solid understanding of your options then help you make the best decision for your particular case. If you need help with any matter involving foreclosure, including a strategic default, then please contact our Royal law firm today by calling 248-865-3455. You can also contact us online. We also serve Redford, Berkley, Southfield and Bingham Farms.