I read an interesting article from the WSJ about homeowners who are under water on their mortgage. While their payments are still current and their credit record unblemished, they get a decent mortgage on a new house, at today's much more reasonable prices, and *then* bail on the old house (short sale, foreclosure, whatever).
Lenders are trying to block this by requiring evidence that mortgage and tax payments can be made on both properties before granting the loan, so if you were legitimately trying to turn you old house into a rental, I suppose you would have to have a signed lease agreement in place before moving out -- not very practical.
I wonder when we are going to see a similar strategy from owners of late-model SUV's and other gas-guzzler vehicles. Buy an economical car first, then walk away from the old one.
-Mark Bole
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