ODU's Seiler Featured in Wall Street Journal, L.A. Times
March 06, 2012
Michael Seiler, Robert M. Stanton Chair of Real Estate in Old Dominion University's College of Business and Public Administration, was featured recently in two national media publications, speaking about strategic mortgage default.
Since arriving at ODU from Hawaii Pacific University, Seiler has published a number of groundbreaking studies about strategic default - the practice of homeowners walking away from a mortgage they can afford to pay.
These studies, including one assessing the impact of social connections on the likelihood of homeowners strategically defaulting, have been featured in academic publications, and Seiler and his collaborators have presented their research around the world.
Recently, both the Wall Street Journal and the Los Angeles Times quoted Seiler in pieces about strategic default.
In the Wall Street Journal article, "Are you a default risk?" Karen Blumenthal writes that one in five foreclosures is believed to be strategic, noting that the threat of additional strategic defaults has spread as home prices continue to fall.
Seiler said that strategic defaults can spread in communities like a contagion, especially if influential real estate experts with large social networks - whom he calls "mavens" - are advocating the practice.
Columnist Michael Hiltzik takes a different approach in his L.A. Times piece, "The overblown threat of strategic defaults." Hiltzik posits that strategic default isn't as prevalent as some experts think and that the concern about the trend is being driven by lenders, who stand to lose money if homeowners strategically default.
In that piece, Seiler is quoted saying, "It's always going to be fuzzy," regarding what percentage of home defaults are truly strategic in nature.
Seiler is the founder and director of IBERE, the Institute for Behavioral and Experimental Real Estate (www.IBERE.org). IBERE seeks to become the leading behavioral and experimental real estate research organization in the world and to publish research that will help guide decision making in all areas of real estate - for homeowners, the real estate industry, investors and public policy makers.