I agree that it makes sense to walk away for many people, but a lot of people are hoping beyond hope that the market will pick back up this year or next. Walking away is probably a tough step to take psychologically, so it’s not just a decision based on numbers and logic. You don’t have to drive through many neighborhoods very long before you see a bank owned sign, and this will probably feed on itself as people become desensitized to it and see it as an actual option.
I’m not surprised that the bubble burst, but I’ve got to admit that I’m shocked by how fast it turned around and by how many foreclosures there are out there.