As the likelhood of continuing waves of foreclosures in 2010 increases, America is seeing a dramatic increase in the rise of strategic mortgage defaults.  That is, homeowners who make a conscious decision to walk away from their homes.  They arrive at this juncture for a variety of reasons - financial survival, inability to continue paying the mortgage, or even a flat business decision that their "upside down" home has become a bad financial investment. 

Whether to walk away from your home has become a burning issue among many Baby Boomers whose savings have been hit hard by the recession and equity evaporation.  If you are contemplating a strategic mortgage default, it is best to learn as much as possible and weigh the consequences - both pro and con - of such a decision before taking that step.  A list of current articles is provided here to help you in that task:

• Understanding Strategic Defaults
• Demanding that Homeowners Make Good on Underwater Mortgages Is the Height of Moral Hypocrisy
• No Help in Sight, More Homeowners Walk Away
• Duplicity in mother-of-all mortgage walkaways

Are strategic defaults a moral issue or a business decision?  You decide.  Walking away, however, does carries repercussions:

• It's a black mark on your credit score for seven years.
• In many states, first mortgages are "non-recourse" loans, so the lender cannot get a deficiency judgment against you for the unpaid balance on the note.  However, home equity loans (HELOCs) are almost always recourse loans.  If you have a second mortgage on your home and walk away, the second lender could (but may not) pursue a deficiency judgment or turn the unpaid amount over to a collection agency.
• There are tax consequences for loans if the proceeds were not used for home improvement, repairs, etc.  So, if you used a 2nd TD to buy a car or boat, you owe taxes on that portion of the proceeds.

My advice for Baby Boomers?  Talk to a CPA and/or attorney before making the decision to walk away from your home.  DO NOT talk to the lender(s), as this will just raise a red flag and add to your stress.  Understand your options and consequences.  Then make the best business decision for your circumstances.