海角大神

More and more underwater borrowers are deciding it鈥檚 time to walk from their mortgage. 鈥淕uilt and morality are one side, and objective financial analysis are on the other side,鈥� 68-year old David Martin told msnbc. 鈥淭hey鈥檙e coming to two opposite conclusions. I wonder how many other people are struggling with the same question.鈥�

Three out of 10 foreclosures in 2010 were of the strategic variety, an increase from 22% in 2009. The Mortgage Bankers Association believes strategic defaults are spreading like a virus. In a study entitled 鈥淪trategic Default in the Context of a Social Network: An Epidemiological Approach,鈥� conducted by Michael J. Seiler of Old Dominion University, Andrew J. Collins of the Virginia Modeling, Analysis and Simulation Center and Nina H. Fefferman of Rutgers University and sponsored by MBA鈥檚 Research Institute for Housing America (RIHA) the authors found 鈥淥ne default does little to negatively impact the price of surrounding homes. However, as more and more mortgages in the neighborhood go into default, the negative impact is felt at an increasing rate. Much the same way as a disease spreads throughout a population, so, too, do decisions to 鈥榮trategically鈥� default.鈥�

Despite some experts projecting that the worst is over for housing, the immense shadow inventory of homes is casting a 鈥�well鈥�shadow over the housing market. These estimates of the number of homes in foreclosure or likely to be in foreclosure are all over the map from Corelogic鈥檚 1.6 million to 10.3 million estimated by Laurie Goodman of Amherst Securities.

Michael Olenick pegs the number at 9.8 million with the exposure being $1 trillion. He writes,

The Fed can keep printing, but it won鈥檛 keep homeowners from walking away.