‘Strategic’ home default disaster

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Q: I went late on my mortgage payments in order to get a loan modification. My lender did reduce my payments, but not my principal balance, so I'm still way upside down. I decided to walk away, but I wanted to buy another place first with my Veterans Affairs (VA) loan certificate. The mortgage broker told me I can't qualify because of the late mortgage payments. I thought I was being strategic with my actions, and asked around and got advice from all sorts of friends and accountants, but it seems like I've ruined my chances of getting out from under this place, anyway. What did I do wrong? A: Well, friend, you appear to have fallen victim to several of your own incorrect assumptions and fallacious lines of reasoning along the course of your decision-making process recently. First off, you incorrectly believed that principal reduction was even a reasonable outcome to expect from your loan modification. The data shows that just over 1 percent of loan modifications actually in...