While simply walking away from a mortgage whose value has outstripped that of the relevant house may seem like a simple solution to debt problems, a recent report from CNN Money says that this could pose additional problems to consumers down the road.
The report says that even those consumers who attempt to rehabilitate their credit score by making responsible payments in full across other areas of their budget will not be able to fully repair the damage to their financial reputation, which could be present for at least seven or eight years.
However, Keith Gumbinger of mortgage information publisher HSH Associates told CNN that "it might be a little more difficult for them to borrow, but [banks'] drive for market share - to profit from making loans - will trump that caution. I don't think we'll see a full denial."
Consumers in this position should be sure to stay abreast of all changes to their credit report, and rapidly correct any errors that are present on it. This will help avoid any unnecessary damage to their credit scores, experts say.
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