The Real Deal Miami

Underwater homeowners opt for strategic defaults

October 27, 2009 03:04PM

South Florida homeowners are doing the math and deciding to bail out of mortgages that are greater than their properties are worth. This approach is called a strategic default, a maneuver that’s being put to more frequent use as owners consider decades worth of being underwater on their loans, even if they can afford to make the payments. Experian, the credit bureau, and Oliver Wyman, a New York-based international consulting firm, reported that in the fourth quarter of last year, strategic defaults accounted for an estimated 28 percent of all defaults in Miami-Dade and Broward counties, an 8 percent rise from a year ago. Property values have dropped 48 percent in the last year, and the number of strategic defaults is expected to rise. [Miami Herald]