I know a realtor who bought a house in 2005 for 800k. Right now he owes 1.2 million. I don’t know the details of the loan, if he did a re-fi and/or HELOC or if it’s an Option ARM. In any case, he is upside-down on it.
He tried to get the bank to do a loan modification on it. They didn’t give him the time of day. He heard that would be the case until he gets their attention by not paying. So he intentionally has not made a payment in 4 months. He has not received a NOD. At 51 years old, he says if the don’t work w/him, he will live there until they take it and then move in w/his parents.
I think we can expect anyone who is upside-down to strategically not pay so they can get loan mods and/or principle reduction. People will want to get theirs.
