TUCSON, Ariz. — As if enough homeowners underwater in their mortgages hadn't already walked away from their properties, a new academic study suggests doing so is the right thing to do.
In a new paper, Dr. Brent T. White of the University of Arizona's law school, argues the 15-million Americans who owe more on their mortgages than their homes are worth would be smart to hand over the keys.
The paper, titled "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis," claims many of those borrowers will spend "hundreds of thousands of dollars" that they "have no reasonable prospect of recouping."
And in a sentiment not likely to be embraced by lenders, White adds that the penalties for walking away from a mortgage aren't as painful or long-lasting as many people assume. In fact, states White, as long as the homeowner remains current on other loans and credit cards, a solid 660-plus credit score can be rebuilt within two years.
