If the circumstances stay the same – employment/income continue… then I can see arguing that the home-debtors should honor their commitment regardless.

That said – I’ve watched friends face the loss of his job, her bonuses/pay raises eliminated. They bought in 2004 and could easily make thier payments. They put a big chunk down (more than 10%). With his income down AND being 200k underwater – they tried to short sell. Bank ended up rejecting the deal – and forclose last month. It was actually one of the faster NOD to Trustee sales I’ve seen – June got the NOD, Sept the house went back to the bank.

If he hadn’t lost his job – they’d be riding it out. And these aren’t deadbeat types.