Strategic Defaulters Add to Foreclosure Crisis

Strategic defaulters are a new trend that is threatening recovery of the housing market.

Unlike borrowers who defaulted on their mortgage because they lost their job or purchased a home they could not afford, the strategic defaulter can afford to keep paying the mortgage, but believes it is best financially to let the house go into foreclosure.

According to a recent study by Experian, the number of strategic defaults more than doubled to 588,000 from 2007 to 2008, mainly because the homeowner owed more than the house was worth.