海角大神

In an LA Times about underwater homeowners stuck in North Las Vegas, reporters Ashley Powers and Alejandro Lazo quote heavy-equipment operator Charles Mills, 鈥淲e talked about it: What can we do with the house?鈥� Mills said. 鈥淣obody鈥檚 going to buy it. Nobody鈥檚 going to rent it. If we walk away, my credit鈥檚 shot. We鈥檙e stuck.鈥�

The unemployed Mills has a job opportunity waiting in Oklahoma but doesn鈥檛 think he can leave the house he bought in 2006 for $308,500 that will fetch less than $106,000 today. Mr. Mills has company as 80% of North Las Vegas homeowners owe more on their mortgages than their homes are worth.

鈥淲alking away, it does wreck your credit history for a while and you can鈥檛 get another mortgage for seven years,鈥� said Richard Green, director of the Lusk Center for Real Estate. Defaulting also makes it harder to rent an apartment. 鈥淭he other thing is, there is also some sense of obligation to repay your bills,鈥� he said.

But is Mr. Mills right that he should stay strapped to his sinking home to save his sacred credit score?

Sure, Fannie Mae claims it is locking out strategic defaulters for seven years. But how long will the government-owned mortgage buyer maintain that policy? After all, a new study by TransUnion shows that mortgage-only defaulters are good credit risks. Julie Schmit writes in ,

TransUnion鈥檚 research shows that those who only default on mortgages are less likely to then default later on new car loans or credit cards than are people who default on mortgages and at least one other debt at the same time.

This study confirms the findings of credit scoring firm FICO. Strategic defaulters tend to be more savvy about credit, using credit lines less and having high credit scores (prior to walking away).

TransUnion found that credit scores bounced back quicker for mortgage-only defaulters.

So while many people paint strategic defaulters as ethically challenged, the numbers would reflect that these folks are anything but. They honor their debts except when their fiduciary duty to their family takes precedence.

So as Steve Chaouki, TransUnion vice president says, those that walk away 鈥渁re less risky than they appear. Lenders will want to lend to these people in the future.鈥�

Meanwhile the Mills family has walked away from two car loans but are determined to hold on to their house. 鈥淭he cars, those are toys. Those are material things,鈥� Mills said. 鈥淭his is home.鈥�

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