Walking out on the mortgage? Not so fast.

Even in Asheville, North Carolina it happens.  I must admit that I am guilty of it.  I have unfairly judged some of my neighbors who have gone to foreclosure – times are rough.  That being said if you are relying solely on the headlines, you might be tempted to think that most people who owe more on their home than its current market value were walking away from their mortgages and allowing the property to go into foreclosure.   The reality is that is just not the case.  In fact, most people still think paying the mortgage is a priority.  According to the National Foundation for Credit Counseling’s 2010 Financial Literacy Survey.

The survey also asked under what circumstances, if any, it’s okay to default on a mortgage. Only 23% of respondents answered that foreclosure is justifiable if the property is now worth less than what is owed on it. Further, 15% replied that there is no justifiable circumstance under which it would be acceptable to default on a mortgage.

The survey also found the overwhelming majority of consumers, even those in financial distress, still consider their mortgage payment a priority. When asked if they were unable to meet all of their financial obligations, would they be more likely to keep their mortgage current, or their credit cards current, 91% of respondents said they would pay their mortgage first.

“Taken together, the NFCC survey data brings us some encouraging news: Consumers still place a priority on making their mortgage payment, less than one-fourth think that defaulting on a mortgage is justifiable simply because the property is underwater, and a significant number take mortgage obligations so seriously that they find no acceptable reason to default on a home loan,” said Gail Cunningham, spokesperson for the NFCC. “Americans continue to prioritize their obligation to service their mortgage loan, and this is indeed good news for homeowners, mortgage lenders, and the housing market overall.”

Source: National Foundation for Credit Counseling

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This entry was posted on Monday, June 21st, 2010 at 11:24 am and is filed under Asheville, Foreclosures, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.