More and more people are simply walking away from their mortgages. And why not? Let’s say you’ve got something like a zero-down 2/28 mortgage. You’ve just hit the two-year mark and have a massive reset. You may be upside down on the house. Why not walk away?
In fact, there’s even a company called You Walk Away that, for $955 claims it will take care of all her walk-away
On the other hand, there’s people who deliberately have “gamed” this system.
A couple of y ears ago, I overheard someone who had just such a zero-down, 2/28, who made it clear that he was renting a house for 2 years, then moving on. Since banks and other lenders didn’t ask hundreds of thousands of people like this to verify their income — or even, perhaps, verify their names — all this guy has to do is “lather, rinse, repeat” and hop into a new 2/28. As he was talking almost 2 years ago, he probably did just that. Of course, when his 2-year “rent” is done on his next home, he’ll probably hit a wall after that.
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