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What happens in the BA when mortgage payments are scheduled to go down, and people still default?
2010 Mar 11, 11:46am 1,243 views 2 comments
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MarkInSF
@
2010 Mar 11, 1:47pm
The biggest predictor of strategic default is how deep underwater you are. It has very little to do with interest rate or payments.
I'm sure there are many stories like this. Defaults are still on the low side from Marin down through Santa Clara relative to elsewhere in the BA, but they have risen dramatically over the last year.
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 I have an interesting story.
My wife has a co-worker that has defaulted on her (the co-workers) mortgage. She lives in San Jose, and makes good money.
So, she instead of going through foreclosure, the bank has agreed to
do a short sale.
The woman stopped making payments a long time ago.
Her interest only loan, is due to reset in may.
The rate will go DOWN.
She is STILL defaulting. Even with a lower rate.
Now how is THAT going to affect the local BA fortress markets?
LarryPatrickMaloney
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