Joe Aldeguer Explains How to Get a Fresh Start through Strategic Default

Joe Aldeguer

Joe Aldeguer, a Chicago rooted financial expert, says that Strategic Default may help some homeowners start fresh when faced with a home whose value isn’t what they were promised it would be.

The Boom

Many homeowners were caught up in the booming real estate market of the mid 2000s, says real estate expert Joe Aldeguer, and were blatantly promised that their home’s value would increase at around 4.5% annually. Sadly, cites Joe Aldeguer, it isn’t happening that way at all. Many homeowners are now sitting “underwater” in a house they were led to believe would help secure their future. Joe Aldeguer says it is time to get real and face the possibility that real estate isn’t the golden egg it was once thought.

The Bust

In Joe Aldeguer’s home city of Chicago, the average home value in July of 2007 was around a quarter million dollars. Today, that number has slid to just under $180,000. For families who fall into Chicago’s median income of around $41,000, that is nearly two year’s salary. Over-inflated home prices and irresponsible lending, says Joe Aldeguer, were the pins that popped the housing bubble.

How Strategic Default Can Help

In some cases, says Joe Aldeguer, once a person ceases to pay his or her mortgage, there is a time lapse of up to two years before the lending institution can physically acquire the property. This time cushion can allow a homeowner the opportunity to save the equivalent of a mortgage payment each month. This extra cash can be used to save for rent, pay off other debt, or build a retirement nest egg, cites Joe Aldeguer.

Why Strategic Default?

Joe Aldeguer points out that if a home’s value is less than the homeowner’s loan amount, the bank isn’t even going to consider offering any concessions on the loan until it is in default. Joe Aldeguer notes that a Strategic Default doesn’t always end with leaving the residence. In some instances, a bank may be willing to modify the loan terms so it is more agreeable with the current market situation. Homeowners wishing to be free of the burden of an overpriced parcel may choose to default intentionally if there appears to be no other timely alternative, says Joe Aldeguer.

When Should Defaulting Become an Option?

From his office in Chicago, Joe Aldeguer often advises clients that a strategic default may be a good fit for their situation if there is no other recourse that ensures financial stability.  When there is no way to foreseeably attain equity in the property, says Joe Aldeguer, defaulting may be a wise choice. Additionally, Joe Aldeguer reminds the mortgagee that the money being paid every month will never be recouped from the bank. Once a home is so far upside down, there is little likelihood of its value skyrocketing again. If the homeowner wishes to secure his or her financial future, sometimes letting go is a much better decision that staying and drowning.

Joe Aldeguer may be reached at his office in Chicago by calling 312-945-8105.