What is a strategic foreclosure?

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What is a strategic foreclosure?

Asked on August 5, 2012 under Real Estate Law, Texas

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Well, if your house is underwater and you owe more than it is worth, many people walk away from the house as a "strategy" figuring it is better to rent than to keep conrtibuting to an underwater loan.  But the results are the results in foreclosure: listed the same on your credit report for 7 years with bad credit.  So it may be best to take advantage of the many deals for home owners that are out there or to give the lendler a deed in lieu of foreclosure and have the waive the deficiency (the amount left over on the loan after the house sells).  Good luck.  


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