Returning to the question from the first few classes: Why don't more people strategically default? http://money.cnn.com/2010/02/03/real_estate/foreclosure_deficiency_judgement/index.htm?hpt=Sbin Not all loans are non-recourse loans, and with falling market prices and the general lack of interest in/notice of foreclosure auctions, the sale may not cover the amount due on the mortgage. The period of time the lien holders have to 1) file their deficiency claim and 2) collect on that claim (with accrued interest) is staggering. The bank has many tools to collect - including garnishment. The article does quickly mention potential absolution, but again the homeowner must know to ask the bank for clemency. Though it does recommend getting legal advice, the moral is laid clear at the end: "If you break a promise, you help your finances at the bank's expense. Don't be surprised when the bank does the same." That could scare a lot of people to keep paying, "at least until the house's market price recovers". If ever. -- StephenSevero - 04 Feb 2010