Housing crisis spawns mortgage market distrust, disdain, bitter desire to extract retributions
by Broderick Perkins
(10/8/2012) With many believing they've been taken to the cleaners by the
mortgage market, 68 million Americans say they have right to retaliate,
renege on their mortgage agreement and refuse to pay up.
They are mad as hell and don't want to take it anymore.
Tossing legal, ethical and moral considerations aside, one in three
believe a strategic default is just fine and half of them know
someone who already has walked away from their mortgage.
The latest survey on tossing the house keys in the circular file found
moral indignation as a driving force and that might not bode well for a
system based on trust and responsibility.
A recent survey of 1,026 U.S. adults, conducted online by JZ Analytics
for ID Analytics found 32 percent believe homeowners
should be able to strategically default on their mortgages without any
The survey also found that 28 million Americans (13 percent) would likely
strategically default on a mortgage and 36 million Americans (17 percent)
know someone who has strategically defaulted on a mortgage.
A strategic default occurs when a homeowner, who is financially able to
make the mortgage payment, decides not to and allows the home to go into
foreclosure, often because he or she is underwater, owing more on the
home than the home is worth.
Millions of underwater homeowners are disenfranchised by the American
Dream, believe they'll never regain the equity they lost in the housing
crash and decide to just blow off their agreement to pay the mortgage - even
if it means losing their home and giving their credit report a black
John Zogby, senior analyst at JZ Analytics said, "If Americans carry on
with that mindset, it will continue to cause problems as the economy
undergoes a slow recovery. Our research into the consumer opinion of the
economic crisis of 2008 found alarming results. What jumped out is how many
Americans feel it is acceptable for homeowners to walk away from a mortgage
and go into foreclosure."
Sold a bill of goods
For years during the housing boom, the mortgage market hooked consumers on a
diet of toxic home loans that proved deadly for
Racial minorities were especially targeted with subprime loans, even when
they were qualified for more affordable mortgages.
Even after the market crashed and lenders were sued and agreed to
settle for billions - without admitting any wrongdoing -
a financial industry in denial grew an institutionalized culture of foreclosure abuse.
Reports reveal lenders continued forms of foreclosure abuse both
National Mortgage Settlement negotiations and, continued the practice
this year, after lenders agreed to the settlement, according to
the California Monitor, launched as California's watchdog for the national
Creating a nation of twice- and thrice-victimized consumers,
lenders continue to be charged with numerous counts of racial discrimination leaving select
neighborhoods distressed with unkempt foreclosure properties.
"We commissioned this survey to get a stronger understanding of consumer
sentiment surrounding the mortgage crisis/financial slowdown, in particular
consumer credit behavior and identity fraud in our current economy," said
Dr. Stephen Coggeshall, chief technology officer at ID Analytics.
What the study found was a new and troubling consumer mindset - if the
banks can do it, so can we.
It's okay to stretch the truth - 36 million Americans (17 percent)
would exaggerate personal information to obtain credit.
Poor credit shouldn't be a hindrance - 77 million Americans (36
percent) believe it's socially acceptable to have a poor credit score.
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