What is the difference between a Strategic Default and just walking away?

Asked by Trulia New York, New York Fri Jan 11, 2013

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James Furlong’s answer
James Furlong, Agent, Brookline, MA
Fri Jan 11, 2013
It's the same thing. "Strategic Default" became a trendy name in the last few years of the real estate recession. In some cases the home-owner chose to walk away even though they had the financial ability to continue to continue to pay their mortgage. In other cases the homeowner could not afford the mortgage payments. Strategic default has been common in commercial properties for years.
1 vote
Mitchell Hall, Agent, New York, NY
Fri Jan 11, 2013
Nothing actually. A strategic default is just a name for people who walk away from their home/or property but they call it a strategic default or a business decision. Cut your losses jeopardize credit score for the short term and move-on. A business loss. A strategic default is for people who can afford to make the payments but no longer want to because the property value is less than their mortgage.

However it may seem strategic but in some states the banks can still collect 10 years later. In my opinion you are much better off trying to negotiate with the lender short sale or trying to hold on to the property then walking away strategic or not.
0 votes
Miekeba Jones, Agent, Silver Spring, MD
Fri Jan 11, 2013
Hi Trulia New York. Reasons for defaulting or walking away may differ, but a strategic default is similar to walking away.
0 votes
Michael Cheng, Agent, San Jose, CA
Fri Jan 11, 2013
A strategic default is a type of walking away. Either way, you're shirking your legal responsibilities as a debtor. So, I don't see the point in defining a difference.
Web Reference:  http://www.archershomes.com
0 votes
Janet Nation,…, Agent, Baldwin, NY
Fri Jan 11, 2013
Can you define your definition of walking away; stragegic default could be considered walking away so what do you mean?
0 votes
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