Ken Pozek

I've been asked a by a few clients in the Northville / Novi real estate market, the meaning of "strategic default". Simply put strategic default is when a homeowner decides that even though they can afford the home ther are currently living in, they are so far upside down on the mortgage that they'd rather walk away from the house. Here's an example:

John and Sue own a home in Northville worth 300k. Their current mortgage is 450k. With an average rate of increase in a normal market, they could expect their homes value to catch up with what they owe in the next 10-12 years.

Here's the delemna. Do you let your home go and take the hit to your credit for a few years. Or do you continue to pay your mortgage down until you can afford to sell it. It's really a personal decision. In a study done by UCLA last month. They said that 32% of all foreclosures we're seeing are strategic default.

It's important to know the ramifications of a foreclosure. If you have any questions on strategic default, short sales, or how foreclosure can effect your credit, feel free to send me a message any time. If I can't answer your question I have a legal team I can refer you to who will give you a NO COST evaluation of your situation.

Email me at SOLD@kenpozek.com