I think the “walkaway” issue is largely determined by how an owner feels about housing. If they bought with the intention of flipping or selling it at a profit in order to “move up,” then they are more likely to walk away than someone who bought for the sole purpose of living in the home, with no expectation of appreciation, and no desire to move up.
Technically, someone who buys because they think prices will rise in the future (intending to sell and “move up” with the expected proceeds, or to finance their kids’ educations, or to finance their own retirement, etc.) is a speculator, and is more likely to default than someone who intends to stay in the home, pay off the mortgage, then retire/die in that home. Being “underwater” really only matters if someone is planning to move/sell at some point in the future.
Additionally, if the mortgage payments are causing financial hardship, then the “owners” are more likely to walk away if they can get similar housing at a lower cost. That being said, a long-term buyer is proably more likely to make a conservative purchase than someone who is willing to stretch their finances because they plan on selling for a profit in the short/mid-term.
While I’m sure some people are avoiding foreclosure for “moral” reasons, my guess is that most people are acting fairly rationally, and that their actions can be traced back to what their plans/beliefs were when purchasing the house in the first place.
