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As a Florida foreclosure attorney, I believe it’s important to warn my clients about the potential risks of going for a strategic default on their home. There are some cases where strategically defaulting is a very smart move and can actually end up saving you money, but you need to keep in mind the potential consequences as well.
What’s a case where someone might consider a strategic default on their mortgage? Well, some people think that, if the value of their house has fallen so much that they’re making monthly payments that are much higher than what the house is worth, it’s better to voluntarily fall into foreclosure and walk away. It’s a “cut your losses” move.
Speak with an experienced Florida attorney at our firm today.
Call 855-Kramer-Now (855-572-6376).
Florida Foreclosure Attorney Explains the Risks in Strategic Default
One thing that you have to keep in mind, though, is that this strategic default will affect your credit score. This is something that can put a financial strain on you and your family for years down the road. However, if you pay all your other bills on time, the foreclosure may not have a huge impact.
Another risk you run is that your bank will continue to pursue you long after you’ve defaulted to try to collect the money they believe you owe on the foreclosure. In one case, a Miami-Dade county court authorized collectors to pursue a man for $44,000 stemming from his default. If you work with a good Florida foreclosure attorney, however, you should be able to reduce this risk.
Most banks won’t agree to give loans to someone who has recently gone through a strategic default on their mortgage, which is something else you need to take into account. But because the current economy has caused so many people to foreclose, a lot of financial institutions now offer “mortgage repair” loans, so that you will eventually be able to buy a house again.
I do not broadly endorse advocating strategic default, because it is unique to every homeowner. If this is a route you would like to pursue, I do recommend talking to an experienced Florida foreclosure attorney so that you can assess the benefits and minimize the risks associated with this process. Give us a call and we can help you determine if it makes financial sense for you and your family.
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