SALT LAKE CITY — Considered a viable strategy for managing troubled assets in an era of high unemployment, record foreclosures and government bailouts, millions of Americans are considering strategic defaults.
With almost 12 million mortgages underwater, a growing number of homeowners are simply walking away from the places they call home.
Strategic defaults, also known as strategic foreclosures, often take mortgage lenders by surprise because homeowners generally have had excellent credit histories and have previously met all their other financial obligations.
One of the distinguishing factors between a strategic default and other mortgage defaults is that the strategic default is a deliberate business decision. The homeowner has the ability to make payments but simply decides not to because the property value is less than the balance owed on the mortgage.