There are consequences when you default on a mortgage. You lose your home, your credit takes a hit for a long time, and you may have tax consequences. However, I firmly believe that families and individuals need to make the best decisions for themselves. For many with underwater mortgages, ruthless default is probably the best option. The real estate market in some areas (particularly new “ex-urbs”) simply won’t recover in a meaningful way, and people have been turned into debt slaves. Being a slave to debt? Not so good.

I like this article because it provides some information on the perceptions surrounding the morality of ruthless default:

Four-fifths think strategic default is wrong. Those in the unethical minority are four times more likely to renege on loans (allowing for other influences) when their negative equity reaches $50,000. But morality has its price. When the equity gap reaches $100,000, “immoral” homeowners are only twice as keen to walk away from their debts as “moral” ones. People under 35 or over 65 are less likely to believe that default is wrong. So are the well-educated.

(via)