A Strategic Default is a calculated decision by a borrower/mortgagor to stop making payments on their mortgage, even though they may be financially capable of doing so, in order to sever themselves from further repayment obligations on a home that is presently worth significantly less than it was at the time of obtaining the mortgage. There is nothing illegal or morally wrong with pursuing this course of action because the Strategic Default is effectuated in accordance with the terms of the loan. What happens is, the borrower/mortgagor notifies the lender of their intent to surrender the collateralized property, which has the effect of putting the ball back in the lender’s court to sell the home and satisfy the balance of the loan.
There is a difference between a Strategic Default and merely walking away because the decision to Strategically Default is only available to borrowers who have an ability to pay their mortgages, but may not want to consider doing so because of the financial imprudence of continuing to make payments on an insolvent property.
The Victoria Law Group can help you employ this alternative as a viable means of escaping an underwater property and taking a step towards gaining financial stability.