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An underwater borrower’s strategic decision to default on a mortgage is triggered not only by economic conditions but how fast the notion can be transmitted throughout a society, which could either result in a full market recovery or a systemic collapse, according to a new mortgage industry study. The study, Strategic Default in the Context of a Social Network: An Epidemiological Approach, suggests that the key to understanding strategic default is to look at it in terms of a disease and how contagious it is. “As social animals, humans knowingly or otherwise look to their peers before...