Reply #22: Or they might have plenty of money to pay ALL of their bills, including the mortgage.

[pnwmom]

But they don't want to owe $600K on a $400K house, so they default.

They lose the house, but also dump a $600K obligation, so they come out ahead. The money they save could pay for several years of rent while they wait out the downturn.

It's not fair to the rest of us who are trying to meet our mortgages, since it adds to the downward pressure on the market. But there it is.