<strong> </strong>

<strong><a href="http://h4hconsulting.com/cms/wp-content/uploads/2010/06/scale.jpg"><img class="alignleft size-medium wp-image-203" title="scale" src="http://h4hconsulting.com/cms/wp-content/uploads/2010/06/scale-268x300.jpg" alt="" width="268" height="300" /></a><a href="http://">What is a strategic default and why should it concern you?</a></strong>

In simple terms a strategic default is when a homeowner simply walks away from a home and its mortgage.  It sounds like a last resort, an act of desperation if refinancing or mortgage modification does not work out.

Strategic default, also known as voluntary foreclosure is when the borrower decides to stop paying a mortgage even though they can still afford the payment. For many people who are upside down on their mortgage, the decision to strategically default is one that is difficult, but often times is the first step to financial freedom.

The Wall Street Journal’s Real Time Economics reported that:
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	<li>Homeowners start to default once their negative equity passes 10% of the home’s value. After that, they “walk away massively” after decreases of 15%. About 17% of households would choose voluntary foreclosure as a solution – even if they could pay the mortgage – when the equity shortfall hits 50% of the house’s value, they found.</li>
	<li>Defaults continue to rise, nearly 1/3 are strategic defaults and this trend continues to move upward each month
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	<li>Ten million Americans owe more on their homes than what those homes are worth.  That number is expected to rise to 21 million by the end of this year.  If one fifth of those folks default on their loans, the banks and investors stand to lose as much as they did in the savings and loan crisis of the 1980’s and ‘90’s.  Plus taxpayers would be out more in bailout money, and credit would be trashed for years for borrowers who defaulted, but there is up side.</li>
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In this time of uncertainty in the market and economy, many homeowners have opted for this strategy.  If you are considering this, you are not alone. If you are going through it because you have no other options, or for other reasons our team at H4H Consulting <strong><em>will not judge</em></strong> your reason. We just want to <strong><em>help you find solutions and u</em></strong>se the law to <strong><em>your advantage.</em></strong>