Ugh. I cannot believe anyone recommends just "walking away". First and foremost, when you signed your mortgage papers, you KNEW that it was an investment, and like all investments, there is a risk for loss. But, unlike a typical investment, the consequences of walking away spread to everyone in your neighborhood. Your house has lost value. Suck it up and realize that your greedy attitude of "me first" is the exact reason we're in this situation to begin with. The only people I truly feel sorry for are those who bought a house within their means, on a conventional mortgage, and have gone into foreclosure due to circumstances beyond their control [[job loss, etc).

I bought my house in Livonia for $180k almost five years ago. It's a very modest ranch, and I admit I'm jealous of friends who are now buying bigger houses for a whole lot cheaper. A real estate friend of mine estimates my house to now be worth $128k to $135k. I probably have only knocked off $20,000 or so on my loan. I couldn't be much more upside down, which prevents me from even refinancing - something that'd easily save me a couple hundred bucks a month. But rather than try to weasle out, I've decided to put money into improving the home because I know I'm going to be here for a while, like it or not. I consider the purchase of my house a contract, that even if not legally binding, a social and moral obligation to myself and my community. Walking away makes a bad situation that much worse for your peers. The banks don't really care either way.

I think that anyone who walks away from a home willingly should never be allowed to purchase property again. Rent only; because obviously renting was your intent in the first place. Neighborhoods are strong when neighbors are responsible and look out for one another. If you walk away, break a neighbor's window or run over their mailbox - you don't want to cast any doubt on how you really feel.