When homeowners take a mortgage out on their home, sometimes they make the decision to strategically default. This means they stop making payments on their mortgage even though they are financially able to make further payments.

California will undoubtedly be a area of focus for further studies on strategic default. They are what’s called a mega-housing bubble state. 

How to strategically default on your mortgage is up to you. There is more than one way to go about it. Usually, people decide to strategically default on their mortgage because they owe more than the house is worth. While some would consider this shirking of payments immoral, it happens all the time. So, if you need to default on your mortgage, and you have no other options, think it through.

What will happen when you strategically default on your mortgage? You lose your home. You give up on trying to pay it off and turn over the property (as well as your debt), over to the mortgage lender. They take possession of your home and you are left with nothing. The bank does take a loss with the debt on the house, but more than makes it back with the house itself. A rumor is floating around about the immorality of defaulting on a mortgage when you could feasibly raise the funds to pay it. Plain old rubbish. If it’s legal to do and will save your life, then do it. 

Talking to a financial advisor about the most appropriate means to go about defaulting on your mortgage depends entirely on the circumstances of your situation. A professional, someone with experience with guidance in such matters, can save you from possibly “shooting yourself in the foot”. Not being able to pay your mortgage is already a loaded weapon, waving the thing around without knowing what to do with it is down right dangerous. Consult a professional.

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.