Orlando homeowners<\/strong> have been purposely defaulting on their mortgages for several years now. When people become aware of the reality of their situation, they make a conscious decision to stop paying their mortgage. In most cases, I can\u2019t say that I blame them. Don\u2019t get me wrong, I would never tell a client to stop paying on their mortgage. However, I do tell my clients what their house will sell for and about how long it will take to sell and they do the rest of the math on their own. Some Orlando homeowners<\/strong> are worried about their moral obligation to pay the mortgage. The truth is that the homeowner entered into an arms-length transaction with their lender in which both parties had competing interests thus spelling out their obligations in a clear, signed contract. Unless the contract states that the homeowner has a \u201cmoral obligation to pay,\u201d then it\u2019s plain and simple – they don\u2019t. However, there are other options available to homeowners like doing an Orlando short sale<\/strong> or a loan modification.<\/strong> In my opinion, most loan modifications that get approved just don\u2019t make financial sense unless they reduce the principle balance of the loan.<\/p>\n Strategic default is actually something that is caused by the lenders. The fact is, lenders won’t even consider entertaining a short sale<\/strong> unless a homeowner is behind their mortgage thus forcing the homeowner stop paying the mortgage.<\/p>\n
Although Bienes ra\u00edces en Orlando<\/strong> is making a steady recovery and I believe will continue to do so. There are Orlando homeowners<\/strong> that will never get the money back that they\u2019ve put into their property.<\/p>\nStrategic default\u00a0 Vs. Moral Obligation<\/strong><\/h2>\n
Here are the facts;\u00a0 when a homeowner borrows the money to buy an Orlando property<\/strong>, they have entered into a business transaction. The lender evaluated the risks and concluded that it was a risk worth taking. For its protection, the lender also required that the homeowner put the property up as collateral, as well as any equity that they had in the house.
The contract spelled out that if the homeowner doesn\u2019t pay, the lender has the right to take the property and sell it before the homeowner gets any equity back – if there were any equity left, which of course in these cases, there isn\u2019t. The lender would not have approved the loan if they didn\u2019t think it was a smart business decision. The homeowners choice to enter into this agreement was also a business decision.
It\u2019s now obvious, that both the homeowner as well as the lender made a bad decision. Now, the contract spells out what happens if the homeowner stops paying, the lender gets the property.<\/p>\n
By doing a short sale<\/strong>, the homeowner is able to get their house sold and walk away from the responsibilities of the mortgage. Also, there are now several \u201ccash for keys\u201d programs available where lenders offer substantial cash incentives for doing a short sale,<\/strong> sometimes up to $30,000.00 depending on what kind of loan they have and who the lender is.<\/p>\n
Your value as a person is not determined by the value of your real estate, or how much money you owe to a bank.\u00a0 You are worth more as an individual than your bank will ever understand. Life is too short, and there are so many things more important than an underwater mortgage. For many Orlando homeowners,<\/strong> it\u2019s literally the difference between happiness and depression.<\/p>\n
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