San Diego Union Tribune, CA
Deeply in debt and struggling with rising mortgage payments, many homeowners in slumping markets such as San Diego County are choosing foreclosure as a business decision despite the serious damage it can do to their credit scores.
Home values have fallen so far that it no longer makes financial sense for some people to keep paying their mortgage, analysts say. Some contend that those who bought at the height of the market, using risky adjustable-rate loans with no money down, may have little to lose but their pride, especially if they have undermined their credit by missing mortgage payments.
Although loan default should be a last resort, homeowners mired in debt “are better off to just get on with it, take their credit hit today and get on with their lives,” said Mark Goldman, a real estate finance instructor at San Diego State University.
“Pull the rip cord and get out now,” Goldman said. “The next step is restoring your credit, and you can't begin the restoration process until you take your hit.”
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