More than a third says walking away from mortgage is okay

More than a third says walking away from mortgage is okay

While the majority of Americans still believe that homeowners should not abandon their homes and default on their mortgage payments, a study by the Pew Research Center finds that 19 percent of the respondents or more than one in three says it is okay to walk away from a mortgage.

The same study found that 59 percent believe that homeowners should not deliberately stop paying their mortgages and just renege on their loans, but 17 percent of those who responded say it depends on the circumstances.

Mortgage default could undoubtedly, however, hurt one's credit score as well as a slew of other potential problems like a law suit.

The survey finds that out of the 2,967 adult respondents, more than one-in-five or about 21 percent owe more on their mortgages than what their homes are worth. This situation could largely account for the risky choice that some homeowners take like stopping deliberately on their mortgage payments and just letting the banks seize their homes.

Nevertheless, others also commit strategic default, when having the means to pay their mortgage, they still choose to stop doing so, causing Real Estate giants like Fannie Mae some serious and mounting losses.

But instead of just walking away and defaulting on mortgage payments, homeowners are advised to seek other alternatives like refinancing, short sales, mortgage modification and even an outright sale. This could be more advantageous considering that having a low credit score and a possible law suit in their hands could be very difficult to recover from.

Foreclosures are still on the rise as lenders foreclosed on a total of 95,364 US properties in August alone. This is so far the highest number of foreclosures in five years.

The survey also showed that homeowners believed that their properties depreciation was caused by the recession and they are most likely susceptible to the belief that walking away from mortgage is an acceptable solution to their dilemma.

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