re: Re It's "immoral" to strategically default on one's mortgage

This thread has been really enlightening. I can't believe all of the people that have issues with this presumed "moral obligation" for a collateralized loan.

I work in various relationships bound by contracts, joint ventures, etc. Each are governed by very specific set of parameters spelled out in the joint venture contract. Companies have the right to back out of the arrangement or to exercise various rights. "Fair" is not a relevant word when the agreement is spelled out and a party exercises their rights. That's why each of these points is discussed and negotiated in the contract, or alternatively some industry standard guidelines are adopted. It's business - if you don't like it, don't sign the contract. Be upfront and play by the rules, but protect your rights and assets as provided for in the contract. Your stakeholders (shareholders, company, family, etc.) should expect nothing less. Nor am I offended when other parties in the contracts and ventures defend their stakeholders in a similar manner.

Why is personal finance any different? Although I have never defaulted on any debt, I can understand and would encourage somebody in dire straits to do so. If the bank doesn't like it, they should provide themselves much more of a cushion by lending much less than the initial collateral value (while factoring in recourse/non-recourse in that state with associated costs and likelihood). Would there have been as much of a housing bubble if the banks had applied that common sense (ignoring FHA/Fannie/Freddie, of course)?