Research Finds Many Americans Believe Abandoning Mortgage is Acceptable

Shedding light on perhaps emerging new attitudes toward a growing number of homeowners who are “under water” or “upside down” on their mortgage, more than one-third of Americans said it is acceptable for homeowners to stop mortgage payments and essentially walk away from their home, according to a new survey from the Pew Research Center. Yet the majority (59 percent) said this increasingly common practice is unacceptable.

The survey, reportedly conducted from May 11 to 31 and surveyed 2,967 adults with a random sampling of telephone calls, said that 48 percent of homeowners have lost value in their homes during this recession, while 21 percent are “under water” on their mortgage; that is, they owe more toward their home than it is currently worth. Facing this situation, some homeowners are electing to stop making mortgage payments and move out of their homes, which in turn forces the bank to assume responsibility for the outstanding mortgage.

Of the 36 percent who approved of walking away from a mortgage, 19 percent agreed it is acceptable under any terms, while 17 percent said it is acceptable depending on context and circumstances. A surveyed person’s current economic standing seemed to affect his/her attitude toward this practice: just 14 percent of those who approve said they live comfortably versus 47 percent of those who approve are just barely or not able to meet expenses at all. Twenty-five percent were currently struggling to pay their own bills, attain medical care, or have had to borrow money from a family member to pay bills.


More approved of walking away from a mortgage if they themselves are currently unemployed versus those who are employed. Democrats, people who live out West—where the housing market is perhaps at its worst—people under the age of 65 and city dwellers are all generally more agreeable to the practice than their counterparts. Men slightly outnumber women in approval of the practice (22 versus 18 percent) and the less-educated (high school or less) are more likely to accept the practice than those who have attended at least some college (21 versus 18 percent). Twenty-five percent of renters said it is okay to walk away from house payments.

Although the recession and housing market woes seem to be causing a slight increase in approval of walking away, note that the number of people who do not approve of this practice—no matter the circumstance—still largely outnumbers those who do approve. Even 75 percent of people who are struggling to pay their own bills and attain medical care and 62 percent of those unemployed do not approve of homeowners walking away from a mortgage.

To view the complete results of the study, click here.

Written by Clare Pierson

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  • One has to ask if a lender would walk away from an investment in which the lender was under water. Of course the decision would be predicated on facts and circumstances but if the lender was substantially underwater and further investment in the underlying property would make little to no difference to the financial position of the lender (as limited partner, limited liability member, stockholder, etc.) and there was no substantial detrimental consequences to the operations of the lender, few shareholders would insist on further payments even if the property was the headquarters of the lender. While lenders want to maintain and even expand the views of the majority in this survey, it is no doubt hypocritical.

    In the financial realm a home is an investment and no more. It can be replaced. If a homebuyer makes a mistake or finds that the investment no longer is advisable, why shouldn’t the homebuyer walk? While there are legal protections which apply to homes and do not apply to other “investments,” there are no rules which bind a homebuyer to any higher standard. Some argue some moral or ethical standard but, in fact, the reason why law exists in this area is because lenders refused to abide by such standards and too frequently foreclosed over minor infractions.

    If the majority believes the laws should reflect their moral or ethical standards, they are free to have them changed. The problem is most of us want the current laws and rules in place, just in case something happens to us or those we care about. There is a reason why they exist

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