My Student Loan Cosigner Died and I’m Thinking of a Strategic Default

Question: Dear Steve, Currently, I have massive student loan debt, graduated in 2014 and still have $120k in total student loan debt with $55k in private student loans. For my private loans my co-signer passed away two years ago and I am currently looking at strategically defaulting. I have a few questions on private student … Read more

Which of Your Debts is More Important

This article came out from the Federal Reserve Bank of New York. It’s a wonderful look at debt from an analytical point of view. I’m so glad they wrote it. When Debts Compete, Which Wins? Jacob Conway and Matthew Plosser When faced with financial hardship, borrowers might choose to repay some debts while falling behind … Read more

I Looked Into Living Free and Clear and I’m Confused. – James

“Dear Steve, My wife and i owe about $20,000. credit cards debt. We have adjustable mortgage that we owe more than the house is worth. We bought the house for $280.000. We owed more than $320,000. The current market value is about $160,000. We would like to pay off our debts sooner. I looked into … Read more

Would you continue making payments in my situation? – Dan

Defaulting on 80/20 interest only loan intentionally. Have enough income to make mortgage payments. Home is approximately 100,000 underwater. Entering 6th year of mortgage, nothing towards principle at all. Payments adjust in 4 (2016) years with an increase of 400 dollars. DO NOT qualify for loan remodifications due to sufficient income. No chance of refinancing … Read more

Just Thinking About Strategically Defaulting on Your Mortgage? FICO Says They Know Who You Are

FICO recently released a study that claims they can pinpoint those who are prime candidates for strategically defaulting on their mortgage. Strategic defaulters can be defined as those able to make their mortgage payments but unwilling to do, often because their mortgage is worth more than their property value. Researchers at FICO have determined an … Read more

We Gave Our Home Back in a Strategic Default But Have Some Residual Debt. – Marilyn

“Dear Steve, My husband and I recently completed a strategic default and we feel very blessed — we are renting a great house at 2/3 what our old mortgage was. Our former home continues to drop in value — it is now for sale for $114,000 (and “valued” at $80,000) — we paid $245,000 with … Read more

I’m Going to Stop Paying My First Mortgage. Should I Stop Paying the Second as Well? – Joe

“Dear Steve, house is deeply underwater. bought a second home legitimately. i plan on stop paying on the first home. but i have a second mortgage on the first home. should i keep paying it? gmac owns first mortgage ditech owns the 2nd mortgagt on the first home. i plan on stop paying on the … Read more

What Options Do I Have to Re-Finance My Condo With Bank of America? – Jason

“Dear Steve, I bought my condo when the market was high–bought it for $206,000 Feb 2007. Am told it’s only worth $160,000 now. 790 credit, never missed a payment, and have a stable, decent paying job and have no intentions of getting behind on my mortgage. what options do I have to re-finance? My loan … Read more

Before You Walk Away From Your Mortgage, Read This

Last week I received an email from a desperate couple in Illinois. Here’s the edited version of their note: "My wife and I have been struggling, morally, with what to do. We have two interest-only, adjustable-rate mortgages with two different lenders coming due in May of 2011. I currently can handle paying all my bills–but … Read more

What’s Going on With My Second Mortgage? Did They Settle Or Not? – Greg

“Dear Steve, I owned a home in Arizona but had to move due to a job change. I continued to pay for 2 years in hopes that the market would turn and I could sell it, after which I turned to a short sale to be free of it. The primary bank accepted the sale … Read more

Is It Time to Walk Away From Your Mortgage in a Strategic Default?

With homeowners still slipping under the seas of mortgage default more and more are considering that walking away from the mortgage might be a wiser and more logical solution. This approach even has a name, strategic default. A strategic default might be something to strongly consider if you owe more than your home is worth, … Read more