This post provides newly received information in an Update of the post here on Mediation of Residential Mortgage Foreclosures and the information available on the role of strategic defaults, on Wednesday, July 7, 2010.
"The rich are different; they are more ruthless."
Sam Khater, Senior Economist at Core Logic, quoted by David Streitfeld, "Biggest Defaulters on Mortgages Are The Rich" p. A1, col. 3 (New York Times Nat'l ed., Friday, July 9, 2010).
Any concern with so-called "strategic defaults" needs to take this statistic into account to be realistic:
Homeowners with Million Dollar Mortgages, of which there are apparently quite a few, plan and act out their strategic defaults at a rate of about 2-to-1 compared to people who owe lesser amounts of money on their mortgaged homes.
It appears that these "wealthier" Homeowners are not deterred by accusations of moral depravity or by threats that the Lender will pursue them for the amount they owe beyond the value of the house the Homeowners leave behind in their strategic defaults. See David Streitfeld, "Biggest Defaulters on Mortgages Are The Rich" p. A1, col. 3 (New York Times Nat'l ed., Friday, July 9, 2010).
These are things which Mediators need to be aware of, before attempting to conduct successful Mediations of Residential Mortgage Foreclosures in such cases.
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