The Bee asked readers to comment on law Professor Brent White's findings about "strategic defaults" and why homeowners with "underwater" home loans feel socially obligated to continue paying their mortgages even when it's financially wiser to walk away from their debts.
Here's a sampling of what they said:
Ashley Whatley, Modesto
"I personally do not think it is morally wrong at all," said Whatley, who has chosen to strategically default on her mortgage. The Modesto home she bought in 2007 for $320,000 is now worth about $100,000.
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"We could technically still afford to pay, but why?" Whatley asked. "We were throwing our money away."
Whatley said her lender would not modify her loan, so she is doing what is financially best for her family. The foreclosure sale is scheduled Jan. 4.
"Our credit is trashed right now, but when we think about the long-term advantages, it is very well worth it," Whatley said.
"It's just money, and we will be OK."
Gene Hamilton, Patterson
"If you can still pay, you should. It's a simple moral issue. You have a contract that you need to fulfill," Hamilton said. He paid $490,000 for his home in 2007, and he owes $375,000. Homes in his neighborhood recently have sold for $150,000 to $260,000.
"I'm blessed with a good job, so I keep paying," Hamilton said. "If everyone followed the professor's advice, our entire banking system and economy would collapse. The panic of last October would pale in comparison."
Peggy Gardiner, Modesto
"The most financially sound thing the banks could do would be to renegotiate the balance owed on loans at today's market value," Gardiner said. "Then the bank and homeowner both win."
When banks foreclose, Gardiner said, they lose at least 10 months of mortgage payments, plus legal, holding and resale costs. Because foreclosed homes resell at today's lower prices, she said lenders would be better off preventing defaults by reducing the outstanding loan balance for current homeowners.
"Banks don't want to reduce the loan balances," Gardiner said, "because they are afraid of setting a legal precedent."
Oscar Salas Lopez, Turlock
"When are people going to take responsibility for their actions?" Salas Lopez asked. "They chose to invest, they picked the house and signed all the papers. Why should taxpayers pay for their bad investments?"
The only valid excuse for default, he said, is when a homeowner can't afford the mortgage.
"People should not return their home simply because it is worth less," Salas Lopez said. "It is unethical, and it hurts everyone."
Franklin Phillips Jr., Modesto
"We don't want to walk away from our responsibilities ... but we're looking at all the options," said Phillips, who bought a home for $229,000, then refinanced in 2006, adding $30,000 to his debt. His home is worth about $90,000 now.
"I'll never live to see it worth as much as I originally paid for it," Phillips said. "We didn't create this mess. We thought we were smart enough not to get nailed, but I guess we did."
Harold "Al" Pound, Modesto
"I'm too morally obligated to walk away," said Pound, who owes about $320,000 on a home worth just $140,000.
"We put so much blood, sweat and tears into this house that I don't want to give it up," said Pound, noting how making his monthly payment is a struggle. "Hopefully, prices eventually will go back up."