Recently I’ve encountered a fascinating article by Stephanie Armour of USA Today called, More Walk Away From Homes, Mortgages. Here are some quotes from the article:

“[Voluntary foreclosure is] fast becoming a major challenge to the government’s $75 billion effort to keep distressed borrowers in their homes.” “…About 588,000 borrowers walked away from homes last year, double the number in 2007.”

“People are going to determine it doesn’t make financial sense to hold on to their homes. …Strategic defaults mean foreclosures could be high for a long time.”

“The mortgage unit of Citigroup says one in five borrowers who defaults does so willingly, even though they’re able to pay the mortgage.”

“An unprecedented 16 million homewoners currently are underwater, according to Moody’s Economy.com. That’s about a third of all homeowners with a first mortgage.” “An even higher estimate comes from Deutsche Bank, which predicted in an August study that the number of homesowners underwater will grow… …[to] 48% of all those with a mortgage, by the time home prices stablilize.”

“The most disturbing aspect of this is that it’s becoming acceptable to do, ’says Joel Naroff, an economist with Naroff Economich Advisors, ‘What does that mean down the road for housing and the economy if people are happy to walk away and destroy thier credit? They’re saying, ‘Why pay a high amount if they can get something, even a rental, for less?’”