Why Strategic Default?
BECAUSE YOUR LENDER DOES NOT CARE ABOUT YOU IF YOU ARE PAYING YOUR MORTGAGE
Strategic default is a term used to describe situations where mortgage borrowers stop making their payments they can “afford”. This is a simplistic definition because what you can afford depends on your priorities. From the institutional lenders point of view, you should eat cat food and take your kids out of school before you stop making your mortgage payment. But that is because institutional lenders don’t eat or have kids. They are fictitious entities, constitutionally dedicated solely to the pursuit of money.
Repaying your debts may be a matter of personal integrity that you may or may not be able to afford. But you have no moral obligation the financial institutions because they do not operate in a moral universe. They would exercise strategic default as a fiduciary obligation to their shareholders if doing so would reverse a bad investment without overweighing adverse consequences.
Strategic default is generally the first step of reducing your debt load because lenders rarely if ever make concessions on performing debt obligations (would you?) It is a serious step, however, because its sets in motion forces that you cannot necessarily control.
THIS IS AN INFORMATIONAL WEBSITE. IT IS NOT LEGAL OR FINANCIAL ADVICE. IF YOU ARE THINKING ABOUT WALKING AWAY FROM YOUR MORTGAGE, YOU SHOULD CONSULT WITH A LAWYER.