Is it ever worth intentionally defaulting on a mortgage?

[threaded]

As it so happens, most mortgage defaults are deliberate, and they could pay if they wanted. Think ex-husband, wife gets house, that kind of thing.

[rootsnall]

Don't even think about it as an option.

If you really do owe a packet and have no equity then I reckon it is an option but you must make sure you go bankrupt when doing it. It'll take a good 6 months to kick you out and in that time you've got to stash as much cash away as possible. It helps if you are in a line of business were you can get paid in cash. The mistake people made in the last housing slump was not going bankrupt.

[MPwannadecentincome]

Not strictly true. They have a responsibility to get market value for it - they can't just sell it on for a quid and say you owe them £499999.

IIRC, how they decide that market value is up to them though - but it must be reasonable and documented.

Selling at an auction "cheap" is considered market value.

Lots of people in the last recession got caught out with banks chasing them after handing in the keys thinking that was the end of it.

[threaded]

Selling at an auction "cheap" is considered market value.

Lots of people in the last recession got caught out with banks chasing them after handing in the keys thinking that was the end of it.

IIRC many people thought that the "mortgage insurance" they'd been sold did that for them. Fools! They'd actually been paying the banks insurance to chase them if they defaulted.