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I wouldn't make defaulting my first choice, but I'd get over my guilt about it if I truly couldn't afford it. Considering how few banks have followed through with the restructuring of mortgages, I'd rather try to save up money for deposit/rent rather then attempting to pay something I already cannot afford.
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This is what my son does for a living - he was hired out of college to be a "mortgage remediation specialist" for a major bank who bought a smaller bank that had made a TON of "no documentation" loans in Florida.
What he says is that it is getting almost impossible to get the modifications okay'ed by the underwriters due in large part to the moving target that the government is giving them in terms of legislation and help. As soon as they've done the paperwork based on one thing, there's some hitch and they have to go through the process again. Couple this "banging his head against a wall" day after day, along with being in a cubicle call center calling people to try to help them stay in their house and getting treated like crap because who wants to talk to the bank, his life is pretty much sucking at this point - but at least he's got a job with benefits... (and he is appreciative of that)
But, along with the stories of people who've run into tough times and are doing what they can to make restitution or the best out of a bad situation, he also has stories of people who are completely gaming the system.
In one instance, there was a college professor in Miami who bought at the worst time and now is behind many months (by choice because he makes plenty of money), when my son called to offer remediation, he told my son to make the best offer, in other words, to take $$$ off what he owes, not extending terms or reducing interest rates, that wasn't good enough. He had the audacity to tell my son that his offer wasn't good enough and to come back in a few more months with a better deal, because he was sure the bank would. And the sickeing thing is, he's right. Banks don't want to own those houses.
Oh, and another interesting case is the guy who wanted to deduct his losses at the casinos in Mississippi as a "business expense", there are some real winners out there.
I must be a fool for actually thinking it is honorable and right to pay what I promised to pay...
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