Two foreclosed lower Manhattan condos belonging to hip-hop entrepreneur Damon Dash were auctioned Wednesday with one sparking a bidding war.

So-called strategic defaults (would you classify this case that way or not?) have become a matter of intense debate in recent months.

Strategic default is driven by negative equity, and while it’s not currently a crisis, changes in people’s moral views on the trend could cause a snowball effect, speakers on strategic default recently suggested at a loss mitigation conference in Dallas sponsored by SourceMedia. According to a report in The New York Times wealthier homeowners are more likely to strategically default.

There were nearly $9m worth of liens on Dash’s two properties, which were first offered as a pair, for just under $8m. When the package didn’t sell, they were offered separately, The Times also reported.

Dash quit paying his $78,000 per month mortgage on his Atalanta condo in 2008, according to an article in The Real Deal, which said Dash purchased the 5,200-square-foot spread for $3.875m in 2004 and tried unsuccessfully to sell it for $7.9m in 2008 before the foreclosure filing.

It went for $5.5m and sparked a bidding war. The winner was Platinum Capital, according to published reports.

The other property, a 2,888-square-foot triplex at Sugar Warehouse, failed to draw much interest, and the lender took it back for $3m. Dash bought the loft for $1.8m in 2004 and had also attempted to sell it until the foreclosure suit was filed, The Real Deal reported.

The 39-year-old Dash is perhaps best known for co-founding Roc-a-Fella Records with rapper/entrepreneur Jay-Z. He’s since expanded his business with other ventures in the television, film and clothing industries.

Tell us what you think — Did Dash strategically default, or is he among the many other Americans that can’t make their mortgage payments because of the economy?