After the recent housing bubble, millions of Americans were left upside-down on their mortgage payments. That is, they now owe more on their homes than the homes are worth on the housing market. That sounds like a financial nightmare, to say the least. Although there are many thousands of foreclosures in Illinois, being upside-down on a mortgage does not necessarily mean that the owners cannot afford to make the monthly payments.
A strategic default was a hot topic, immediately after the housing bubble, and although it is not as common a move, today, it still may make financial sense to walk away from mortgage payments. A strategic default should place the homeowner in better financial shape. They must be prepared to rent or live with family for three to seven years, until they regain eligibility for a new mortgage.
Talk to a financial adviser and a lawyer before going through with a strategic default. This is not a financial strategy that is to be taken lightly.