Professor advises underwater homeowners to walk away from mortgages

Are More Homeowners Walking Away before Short Sales and Foreclosures

Brent T. White, a University of Arizona law school professor, says that it's in the homeowners' best financial interest to stiff their lenders and that it's not immoral to do so. White contends that upwards of 15 million homeowners within the country.

"Homeowners should be walking away in droves," White said. "But they aren't. And it's not because the financial costs of foreclosure outweigh the benefits." See the full video below.

According to CNN Money, homeowners in increasing numbers are walking away from their homes rather than keeping up with deteriorating assets and increased payments. "I stopped paying my mortgage in October, after shelling out about $70,000 in interest [over 15 months]," said one borrower, David, who doesn't want his last name used. "Now, I'm just waiting for the default notice."

This unfortunate situation is affecting homeowners across the country within all price points. HouseBuyerNetwork.com CEO Duane LeGate says that Susan's two-bedroom condo in Sonoma County is worth $340,000, but the mortgage balance is $380,000. She can't refinance and it's difficult to sell.

And now reports are emerging of homeowners skipping out on mortgages even though they can still afford to pay them.

"Homeowners should be walking away in droves," White said. "But they aren't. And it's not because the financial costs of foreclosure outweigh the benefits."