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What’s the Motivation of Strategic Defaulters?

Question: Your pieces are my favorites, and I never miss one. You recently did one on real estate in Florida that raised a question

At one point, you say, “Welsh says he stopped making payments six months ago, and has tried to renegotiate his mortgage, offering $150,000. The bank said no. Instead, the house will sell to someone else via foreclosure or a short sale…”

My question: Did he stop making payments because he was unemployed and financially unable to do so? Or did he just decide he wasn’t putting any more money into a house worth less than its mortgage?

BIG difference. The first elicits some sympathy. The second, not so much! Thanks, keep ‘em coming!

Paul Solman: Jason Welsh was featured in a follow-up story from Cape Coral, Florida, on “strategic default.” He did indeed “decide he wasn’t putting any more money into a house worth less than its mortgage.”

You can see that piece and much more from our reporting on the foreclosure crisis below.

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