Although I respect their opinion, I have to strongly disagree with the response by Keith and Kinsey Schulz that this could be a "matter of integrity." Whether it is a strategic default or a decision of what to do with your money, it is NEVER a moral issue or a question of integrity. Don't let anyone tell you otherwise.
My clients' contract with the bank is strictly a legal business document, there to protect both parties should one not be able to perform their duties. If you decide for business and/or personal reasons that you can no longer make payments to the lender, the contract is a road map as to how the matter will be resolved. It does not matter if my clients have $100 or $100,000 in savings. It is no one's business but my clients' to decide how to best use that investment. And I would strongly disagree with anyone that recommends throwing a client's hard-earned retirment cash into an over-priced piece of brick and mortar is a good and moral choice. How misguided that would be.
Certainly, the banks and collection agencies benefit from making the housing crisis a moral one. But, I can assure you there is no VP of Guilt and Pity at Bank of America. Their decisions are strictly business in nature.
Kmade99, you are making the right BUSINESS choices for you. No one should question your integrity.