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I have a family member who did something similar - perfect credit and defaulted on purpose. On a rental property, he was underwater on the mortgage at the time
by vikingerik 3y ago
I have a family member who did something similar - perfect credit and defaulted on purpose. On a rental property, he was underwater on the mortgage at the time of the 2008 crash, so he simply stopped paying and let the bank foreclose and came out ahead that way. Trashed his credit rating but he never had any need for it, he had enough to buy his own house and car outright.
- devnullbrain 3y agoAKA 'jingle mail'
- LorenPechtel 3y agoaka Strategic default. There was a lot of that in states where the lender doesn't have recourse beyond reclaiming the house.
- Sohcahtoa82 3y ago> On a rental property, he was underwater on the mortgage at the time of the 2008 crash What I don't understand is why people worried so much about being underwater. As long as you kept making payments, couldn't you ride it out and still own the house as the market recovers? > Trashed his credit rating but he never had any need for it, he had enough to buy his own house and car outright. This feels like it should be considered some kind of fraud.
- deleted 3y ago[deleted]
- vikingerik 3y agoThe rest of the story in this case was that the tenant had also stopped paying, so it was easier to just let the bank deal with the eviction. As for why worry about being underwater - it's because you don't know the time frame of the recovery; the appreciation might have lagged behind the mortgage interest for the life of the loan, as far as anyone could see in the depth of the crash in 2008.