Underwater Mortgage, Underwater Homeowners | featured news

With millions of homeowners still underwater, some local governments are considering a novel solution: condemning their mortgages through the power of eminent domain. “Federal programs have not been very successful at all, and the private programs have been of limited help,” said Gregory Devereaux, administrator for San Bernardino County, explaining the government's decision to consider eminent domain, a plan the mortgage industry considers the equivalent of the nuclear option. The hard-hit county's board of supervisors is expected to meet Thursday to consider proposals to help homeowners, including the possible use of eminent domain.

A leading housing regulator on Monday announced changes to a government refinancing program that could help up to one million homeowners whose homes are worth less than their mortgage.

Go ahead. Break the chains. Stop paying on your mortgage if you owe more than the house is worth. And most important: Don't feel guilty about it. Don't think you're doing something morally wrong.

That's the incendiary core message of a new academic paper by Brent T. White, a University of Arizona law school professor, titled "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis."