One of my co-workers is contemplating a strategic default. He bought his house at the 2006 market peak at >$400,000 and it is currently worth $200,000. My guess at his household income is around $120,000. He says that they can pay the mortgage payments, but the question that comes to his mind is--why do it? They have lost >$200,000, a staggering amount even for someone with their income. Arizona has very lax rules on going after delinquents. So he's thinking about simply "walking away", i.e., stopping his mortgage payments, packing up, and moving his family into an apartment. He'll take the hit to his credit.