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Today's topic is strategic default. I'm Steve Kramer of the
Kramer Law Firm. I'm a Florida foreclosure defense attorney.
Many clients come to me. They say, "I'm way upside down in my
house but I can afford to make the payments. Should I default?"
So the scenario is maybe you owe $200,000 on your house and it's
worth $100,000. And what you've got to make decision on is it
more worthwhile to keep on paying all this money or is it
more worthwhile to go ahead and default? And that's what a
strategic default is. You're not defaulting because you're forced
to default; you're defaulting because it's an option for you.
You can afford to pay but don't want to pay all that money. This
is a tough choice. There are some attorneys out there pushing
people towards it, advertising for strategic default. I don't
advocate that ever. This is an individual choice where you've
got to evaluate the risks. And this is one where we should sit
down and talk about your situation. The risk is if you
strategically default, maybe you get a short sale done and you
don't owe any money on the house - maybe. Or maybe you get some
other kind of deal, like a deed in lieu, where you give back the
deed to the bank. But you've got be really careful because you
don't want to end up owing money. You've got to read that
fine print. This is one where you might be facing a
foreclosure if you do this. So you've got to be ready, you've
got to have an attorney standing by to defend that case. The
other thing is your credit is going to take a hit. So even if
you can afford to make these payments, you need to be
prepared for your credit to get called in. You may have credit
cards that get canceled, you may not be able to get loans, you
may not be able to buy that new car. Your credit may take a
pretty hard hit from a strategic default. And you've got to look
at the situation from an individual perspective. You've
got to weigh is it worthwhile to pay this mortgage for the next
30 years or am I better off and going ahead and cutting it,
calling it now, and doing a strategic default. Now, it can
work out very well. I represented a lot of people that
got out of their houses without owing any money where it worked
out beautifully. But you've got to know the risks and this is
not for people who are risk adverse. Why am I telling you
this? Because if you're thinking about a strategic default, this
is a very serious decision. You need to talk with somebody, you
really really do. I have dealt with this issue a lot of times,
I can answer your questions. Call me at the number below. I'd
love to talk with you and discuss this. Also, if you're
watching this video on Facebook or YouTube, click the "Like"
button. This way your friends and family can benefit from the
information I'm sharing with you. Again, call me to talk
about your situation. I'm Steve Kramer, the Kramer Law Firm.