Sunday’s New York Times has an interesting article regarding the new mentality of homeowners stopping payments and repairing other financial worries. The Times interestingly calls it a mortgage modification… where the payments are zero. The logic on the part of the homeowners is interesting:
“This type of modification does not beg for a lender’s permission but is delivered as an ultimatum: Force me out if you can. Any moral qualms are overshadowed by a conviction that the banks created the crisis by snookering homeowners with loans that got them in over their heads.”
In my practice, I’m seeing more and more of this thinking. People have other financial problems that need tending and are willing to risk losing their property in order to get their feet under them.