The idea of just sending the keys to your house or condo back to the lender would have been unthinkable just a year or so ago; now underwater owners are doing just that all over the country.  This is especially true once they lose any hope for lender assistance in making their payments and realize that all the bail out money went to large institutions, with precious little for individuals who are behind on their mortgage.  A New York Times article gives one example:  “It was April 2006, a moment when the perpetual rise of real estate was considered practically a law of physics. Mr. Koellmann was 23, a management consultant new to Miami. Financially cautious by nature, he bought a small, plain one-bedroom apartment for $215,000, much less than his agent told him he could afford. He put down 20 percent and received a fixed-rate loan from Countrywide Financial.  Not quite four years later, apartments in the building are selling in foreclosure for $90,000.  “There is no financial sense in staying,” Mr. Koellmann said. With the $1,500 he is paying each month for his mortgage, taxes and insurance, he could rent a nicer place on the beach, one with a gym, security and valet parking.”  What sealed the deal for Mr. Koellmann was when his lender (Bank of America) refused any assistance in reducing his payments when his income had fallen.  So, he gave it back. 

Here is a link to the entire article: http://www.nytimes.com/2010/02/03/business/03walk.html?pagewanted=1

Michael