Study: Democrats twice as likely as Republicans to approve of walking away from mortgages
Democrats are more than twice as likely as Republicans to think that it is acceptable to walk away from their mortgage payments, according to a study by the Pew Research Center published Wednesday.
With house values continuing to plummet, more and more Americans are walking away from their mortgage payments and the practice is giving Democrats and Republicans another subject for disagreement.
“I am sure somebody will try to argue that this is a question of morality,” said David M. Abromowitz, senior fellow at the Center for American Progress. “That paying back loans is the moral thing to do and that’s the difference between the outlook of Democrats and Republicans.”
The study found that 23 percent of Democrats polled believed that reneging on a mortgage was a suitable practice, while only 11 percent of Republicans agree that it is acceptable to walk away from a home mortgage.
Overall, the study found that 36 percent of Americans believe that it is acceptable to walk away from their payments, at least under certain circumstances. Almost two-in-10 (19 percent) believe the practice is acceptable under any condition, while 17 percent say that it depends on the situation.
However, the majority of Americans still view the issue in a negative light. 59 percent of those polled said that it is wrong to deliberately stop paying their mortgage, surrendering their homes to the lender in foreclosure.
Pew conducted interviews of 2,967 homeowners and renters starting May 11-31.
More Americans today are seeing foreclosure as the best and easiest way out. The research concluded that 21 percent of families are dealing with mortgages that are “underwater,” owing more on the mortgage than the house is worth.
These toxic mortgages are burying families across the United States. The Housing and Economic Recovery Act of 2008 intended to restore Americans faith in Fannie May and Freddie Mac, but homeowners continue to struggle with “underwater” home loans.
According to the study, in July alone, lending institutions foreclosed on an estimated 93,000 properties, the second-largest monthly total since they began tracking foreclosures in April 2005. The website for RealityTrac, Inc., shows that foreclosures have gone up 4% from July to August, with sold foreclosures down almost 80 percent and foreclosed properties climbing higher. Abromowitz estimates that by 2011, one-third of all American mortgages will be “underwater.”
The survey showed that nearly half — 48 percent — of all homeowners say that the value of their home declined during the recession, with one-in-five of those with falling house prices agreeing it is tolerable to walk away from a mortgage compared to 14 percent of those whose house prices had maintained value.
Once the dotted line is signed, the mortgagee is on the hook for payment. By walking away from the loan, a homeowner must pay the consequences, a route that an increasing amount of Americans are seeing as the only way out in this “Great Recession.”