AT 75% LTV - Homeowners Consider Walking

According to First American Core Logic 4.5 million home values had fallen to or below 75% of their mortgage balance by the third quarter of 2009.  Those numbers are now projected to climb to 5.1 million homes, or approximately 10% of all homes.  The 75% threshold is being considered a level where more homeowners consider walking away from their mortgage for financial strategic reasons, EVEN though they may be able to pay.  Consultants at Oliver Wyman estimate that 17% or 588,000 homeowners walked from their mortgages in 2008 for such strategic reasons.  The full CNBC article can be viewed at the following link:

This data along with the Treasury Department HAFA program and FHA’s one year suspension of their 90 day no-flip rule that should encourage short sale investors.  Although unfortunate for homeowners, the economy, and valuations those that become proficient in the short sale business could thrive for the next 2-3 years.  Those homeowners still able to pay are not really targets for a short sale as a hardship does not exist.  The key for investors is to get to the homeowner to consider a short sale as an alternative before they throw in the towel.