Real Estate Investment:Would you walk away from your mortgage?

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As housing prices drop, and a growing number of homeowners wait for their mortgages to adjust to higher interest rates, a new mini-trend is popping up across the country: People are simply walking away from their homes, and the mortgage loans attached to them, and sending their lenders the keys.

Is this unethical? Or is it simply a matter of doing the best you can for yourself and your family in an untenable financial situation?

There are a number of interesting opinions on this spread across the Internet. I enjoyed reading this entry at My Money Blog, which asks readers whether they’d ever consider walking away from their home. There are two camps of people on this issue, apparently: There are those who view paying a mortgage as a moral obligation. Then there are those who view a mortgage as a simple legal contract. In this second view, lenders get a certain interest rate knowing full well that mortgage holders could walk away at any time. Those mortgage holders who do decide to walk away must deal with the consequences, which include a devastated credit report.

Searching the Internet, you’ll likely find postings on forums where people brag about no longer making their mortgage payments, and wonder when their lenders will finally take away their homes.

It’s all a little disgusting, to be honest.

No one wants to be “underwater,” where they owe more on their home than what it’s worth. But it’s happened to a lot of people as housing prices across the nation tumble. It’s happened to me, too. We bought our house in 2006, right before prices started falling. Now our house is valued at less than what we owe on it.

And, yes, I’ve dreamed about stuffing my family in our station wagon and driving away. After all, our friggin’ basement leaks every time we get a substantial rain storm. And half our plumbing was apparently installed with duct tape and superglue.

Yet, my family and I stay. And we make our mortgage payments each month. I can’t imagine walking away from our mortgage. Yes, I would love to refinance our loan. But that isn’t happening now. But walking away? How could you look at yourself in the mirror? How could you look at your friends or family members?

So I’ll continue to curse every time it rains buckets around here. And I’ll continue to groan every time my wife checks out Zillow.com to see what our home is currently valued at. But we’ll keep making those mortgage payments. It’s just, unfortunately, the right thing to do.

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