With homeowners still slipping under the seas of mortgage default more and more are considering that walking away from the mortgage might be a wiser and more logical solution. This approach even has a name, strategic default.
A strategic default might be something to strongly consider if you owe more than your home is worth, property values in your area are continuing to drop, your mortgage company won’t give you a mortgage modification that resolves the situation, or you are running out of money to pay the mortgage payment.
The foundation for this strategic default solution is simple, at some point you need to cut your losses and move on. Think of it like a restructuring a major corporation undertakes when things don’t add up for them. If it’s good enough for the airlines and GM, certainly this approach is sound enough for little old you.
Before you do walk away in a strategic default, talk to a local bankruptcy attorney. Most likely you will need to followup the strategic default with a bankruptcy to eliminate the residual debt from the house. But the good news is that if you find a local bankruptcy attorney you like, you meet with them, and come up with a game plan on the strategic default solution and a bankruptcy, your life can begin again sooner and you can get out from under your current solution for which there may be no apparent solution.
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