Many people are walking away from their mortgage in a strategic default so that they can save money by not paying their mortgage during the long foreclosure process.  This is happening so often that banks are changing their strategies.  Recently, Bank of America changed its loan modification program

The longest that we have seen a home owner remain in a home while not paying their mortgage was about 2 years.  This long time was a result of both an apparent strategic default from the prior home owner and a delayed time in an eviction.  Around Thanksgiving 2008 we were asked by a bank to sell a property that had recently been foreclosed on.  We assume that it was anywhere from 6 months to a year prior to the bank hiring us that the former homeowner did not pay their mortgage.  It took until March of 2010 for the bank to evict the former owner and now we have been managing extensive repairs that are costing the bank more than $30,000.  We hope to have the repairs completed and have the property on the market in the next month or so and to sell it as soon as possible.

We often have conversations with homeowners that are upside down on their mortgage and decide to stop making their mortgage payments despite their ability to continue to do so.  This happens mostly when the homeowner anticipates that a foreclosure is more beneficial than waiting for the home to regain value.  Mostly the home owners believe that a strategic default will serve them well.  Many times the homeowners approach these conversations without thought as to the long term impacts that a foreclosure may have on them.

When the home owner has a valid financial hardship, they probably qualify for a short sale instead of doing the foreclosure.  As Virginia and Maryland are considered recourse states, lenders can pursue a deficiency of the balance of the loans after a foreclosure.  When home owners do a successful short sale, most times the bank will forgive any deficiency.