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Strategic Defaults continued…

I can’t stop thinking about the whole strategic default premise. Is it guilt that prevents us from doing what large corporations do without nary a second thought? Do we really care what our neighbors, friends and family think?

I think its more than that. I think fear plays a larger role than guilt. When a corporate entity defaults on their loan, they still have individual homes to go to at the end of the day. The credit of the individual employees aren’t damaged. They can still go out and charge a dinner at a local restaurant, or buy clothes at their local department store.

If I were to default on my mortgage, my credit would get screwed up. I probably wouldn’t qualify for a credit card. Where would I live after they took my home from me? So many things in our daily life depend on good credit scores. Auto insurance is one of them. My rates would probably increase at my next renewal period. Would I be able to rent somewhere else? As a landlord, I always run a credit check on potential renters. It would take several years before I could buy another home. I think fear is what prevents us from taking that big step.

But I guess that’s where the strategy comes into play. I’m supposed to find alternative housing BEFORE I default on my loan…

But wait! I’m a REALTOR! I’m not supposed to talk about these things. It’s real estate Blasphemy! That’s right, the housing market is strong. The market will rebound. The market will rebound. It’s a great time to buy! It’s a great time to buy!

Really! It is a great time to buy! I’ll tell you why in my next post…

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