Look- I’m not recommending that anyone walk away from a mortgage intentionally. As I said in my earlier post, it bespeaks a lack of character.
Instead, I’m amazed that California law is set up this way. There are other states where mortgages are recourse debt– the lenders get to go after a defaulting borrower’s other assets, in addition to the mortgaged property.
The California law is almost a risk-free invitation to gamble. It may have something to do with the speculative element of the real estate bubble, especially if the people doing the speculating are real estate professionals who undertsand the law.
