Far More Underwater Homeowners Should Stiff Their Lenders, Pack Their Bags & Take A Hike, Says Study

ABC News reports:

• Millions of Americans, whose homes are now worth significantly less than their mortgage, could be making an expensive mistake by continuing to try and pay their loan off when they should, instead, be walking away. In fact, owners are willing to keep piling money into a losing investment simply because they're ashamed to foreclose, according to a controversial new study.

• "Homeowners should be walking away in droves. But they aren't," writes Brent White, an associate professor of law at the University of Arizona. He explains that some owners who bought at the peak of the market now owe more on their mortgage than they can ever recoup in their lifetime. Although it would make financial sense to cut losses and abandon their homes, feelings are getting in the way. "A lot of it has to do with shame, guilt and fear," says White.

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• White made his case in a study entitled "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis," which was published in the latest issue of Arizona Legal Studies.

For more, see Walk Away: Why More People Should Abandon Their Homes (Study Finds Homeowners Fight Foreclosure Even When It Doesn't Make Sense).