Roger Lowenstein has published an excellent piece in today’s New York Times regarding strategic defaults – other wise known as walking away from your property.    The Mortgage Bankers of America of course don’t want you to do that….neither does Wall Street or the Obama Administration.  But when Wall Street or businesses make a bad deal, they walk or flush the company.  It’s no big deal.  It happens all the time.

I am seeing more and more information about strategic default.  This could become a REAL problem if this starts to gain more traction.  Although that said, in conversations I’ve had with others recently, the government is doing so much to try to manipulate the market from loan modifications to holding interest rates artificially low – that no one really knows what the market should actually look like.

I suspect we’d be out of this mess in a couple of years if they just let the market work.  I’m sure there are others who say that if we just let the market work, it would collapse everything else in the economy as housing crashed.  I don’t know.  I’ll leave that to the smart people to figure out.

Here are a couple of other entries I made on strategic default – here and here.