How could you know if it’s the smart thing to do without knowing more about the circumstances?

Assuming most scenarios, besides the owner owning the house outright – I would say that is not the smart thing to do.. if it were his primary residence then he should have ridden it out. Where is he going to live now? Tack on 100+k in losses to pay for, his new monthly expense in a house half as much or a rental with as many bedrooms is going to end up costing just as much.

Yeah I think people should get out if theres a wash or they lose a few thousand, but losing 30% and losing your primary residence is not an example of a smart move in my opinion. It’s going to take the guy 7 years to pay off that 130k most likely, might as well just go with foreclosure and start over with fresh credit. Then again maybe the credit wouldn’t be so fresh after 7 if there are any similarities between foreclosure and the new bankruptcy laws…