Thanks for the response. You’re right. The buy and bail “strategy” is not viable for those who have missed payments on their existing loans. In that situation they probably would not be able to qualify for a loan on a second home.

The message I was trying to convey was that for those who have not missed payments, and seemingly can afford the mortgage payments lenders are not willing to negotiate loan modifications. So what options do people in this category have?

The housing market crash has affected everyone and there are many people with legitimate reasons for needing to sell their homes such as in your example of relocating for a job but can’t due to the large amount of negative equity.

If these people have good enough credit to qualify for a loan on a second home I don’t see a reason why they wouldn’t take advantage of that opportunity. I am not condoning buy and bail but it seems the lack of support from lenders themselves is promoting this behavior.

They are buying the second home before missing a payment and defaulting on the mortgage of the first home. They probably had good enough credit to be able to get a second mortgage. This is not a viable strategy for those who have missed payments, lost a job, have less income etc…

People also do this when they need to move to a new state because of a new job etc… They buy a second home in another state and then let the home in the old house default.