Walking away from an underwater mortgage does not necessarily equate to washing your hands of responsibility. By opting for strategic default on your mortgage, you could be risking a lot more than just your credit score. In many states, lenders can sue you for what it still owed on the mortgage, and they can do so years after you’ve literally and figuratively moved on and left the property behind.
From USA Today:
If you go through a strategic default, your lender may file a lawsuit against you, called a “deficiency judgment,” to recoup losses. The lender can demand payment for the unpaid balance: the difference between what you owe, including the foreclosure cost, and the fair market value of the home.
Lenders don’t always bother to go after people who have been forced into foreclosure. But in some states, such as Florida, they have five years to do so.
“I’ve been hearing that lenders are becoming more aggressive about going after deficiencies in homes that they had to take back,” says Gerri Detweiler, co-author of Debt Collection Answers. “Then you can essentially be paying for a home that you no longer have.”