Transportation costs may soon become a recognized expense for mortgage applications if the Natural Resources Defense Council study holds up.

The San Francisco Chronicle reported that the study showed that higher transportation costs resulted in a higher foreclosure rate:

The draft report looked at trends associated with 40,000 mortgages in San Francisco, Chicago and Jacksonville, Fla.

The release date for the final study has not been announced. The research included borrowers’ income and expenses, credit scores and loan-to-home value ratio.

It focused on the average number of vehicles owned per household in a neighborhood, and through a complex formula, found that the likelihood of mortgage foreclosure increased as neighborhood vehicle ownership rates rose.

If transportation costs were as much as 17% of a household budget, as the study suggests, a $5/gallon price for gasoline could negatively impact a family’s budget. Recent years’ foreclosure activity suggests that compunction towards making mortgage payments has given way to liquidity concerns. Moreover, a legal scholar suggests that any moral consideration associated with a strategic default is passe.

Let’s consider the hypothetical case of a family, with jobs in Los Angeles County, who purchased a $400,000 Riverside, CA home in 2007. The home price has withered to $300,000 and the family has “lost” their $80,000 down payment; they are $20,000 “in the hole”. This has them feeling despondent about the future of the property as an “investment”.

The economy is tepid and job security is shaky. It would seem imprudent for one of the two parents to seek employment elsewhere. They’re stuck in a 60-75 minute commute twice daily.

If fuel costs increase some 40-50%, that could add another $150-$200/month to an already shaky budget. The increased transportation cost could be the tipping point that causes the family to abandon the Riverside, CA home for a rental closer to their jobs.

It’s just a theory coming from a study today but transportation costs may very well be a factor in loan underwriting files of the future. REALTORS might consider this study as a consideration when consulting with new homebuyers. Access to public transportation and energy efficiency may be factors that help sell homes in the next few years.

I’ll be discussing renovation financing and energy efficient mortgages at the HomeGain Nation Real Estate Forum, on March 1, 2010. If you’re attending, send me a message on Facebook and I”ll look forward to meeting you in person.