wikipedia: What is Strategic Default? - 05/13/11 04:09 AM
What is Strategic Default?
From Wikipedia, "A strategic default is the decision by a borrower to stop making payments (i.e., to default) on a debt despite having the financial ability to make the payments.This is particularly associated with residential and commercial mortgages, in which case it usually occurs after a substantial drop in the house's price such that the debt owed is (considerably) greater than the value of the property — the property has negative equity or is "underwater" — and is expected to remain so for the foreseeable future, such as following the bursting of a real estate bubble."
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