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A strategic default is the decision by a borrower to stop making payments (i.e., to default) on a debt, despite having the financial ability to make the payments.. This is particularly associated with residential and commercial mortgages, in which case it usually occurs after a substantial drop in the house's price such that the debt owed is (considerably) greater than the value of the ...
If you owned a house that's now worth a lot less than what you owe on your mortgage, would you walk away from the home and default on the mortgage? If so, you'd have plenty of company. In 2009 ...
A new study sheds additional light on the issue of "strategic defaults" in America, offering further insights into homeowners who are statistically more likely to make a calculated decision to ...
When a debtor chooses to default on a loan, despite being able to service it (make payments), this is said to be a strategic default. This is most commonly done for nonrecourse loans , where the creditor cannot make other claims on the debtor; a common example is a situation of negative equity on a mortgage loan in common law jurisdictions such ...
A new study sheds additional light on the issue of "strategic defaults" in America, offering further insights into homeowners who are statistically more likely to make a calculated decision to ...
In 1994, Riddiough coined the term 'strategic default', which is used to indicate purposeful borrower default in order to extract concessions from a lender. [11] The phrase, along with the term 'trigger event,' have been commonly used in the literature and popular media since the financial crisis of 2008.
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There's nothing like a housing crisis to inspire moral ambivalence. In a recent survey conducted by the Pew Research Center, more than a third of respondents said walking away from a mortgage is ...