This article by By Chris Taylor | Reuters – Mon, Jan 30, 2012 4:43 PM EST of the same title has many valid points to consider. Besides the moral quandry, credit records and credit scores impinge on what your future purchase options for cars and homes in the future. Thus it should be a last resort with state and local nuances taken into consideration.
What Taylor did not discuss … just like when you sell stock low and the market regains value … the new owner reaps the gains, not you the seller. You walk away from your home at a low value. When the home may eventually go up in value, the new owner gets those gains. By keeping the house you get those gains because you’re still the owner. Walking away means you also walk away from those possible gains when they come.
And … in the meantime where do you live? Your credit hit would make home ownership a problem for a number of years which may mean you are pouring your money towards rent and a landlord’s benefit. Therefore, if you still have an income to continue to pay the mortgage and no reason to move … just because the value is down is not reason enough to give up.