Understanding real estate walkaways

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More than one person I know is walking away from their home. Strategically defaulting, meaning they can afford to make their mortgage payments, but have decided to stop, stay in the home, and allow the bank to take it in foreclosure, because the home is now worth much less than they paid for it -- and much less than they owe on it.

What they once saw as unthinkable is more and more socially acceptable. In some cases and some circles, strategic defaults are even viewed as an admirable guerrilla tactic and smart financial decision made in denial of the core, emotional desire every human has to hold on to a home.

And these strategic defaults are socially contagious. I know one set of homeowners who recently reunited with several other couples they hadn't seen in years, and realized that three of the four were in the process of walking away.

The data bears this out: a recent study conducted jointly by professors at the University of Chicago a...