I continue to be unconvinced by the arguments for walking away from a mortgage. The arguments run in one of several directions:
Companies act like faceless automatons, so we should too. This is not actually true. Imagine a bank that actually did only what is specified in their contract with you, and not an inch more. That would be a bank you'd like a lot less than any existing bank, and with good reason. They are restrained by various norms, and competitive pressure. This is not to say that they always behave well. But they do not, in fact, simply live by the letter of the contract, and if you think they do, I invite you to read me the part in your contract where they have to provide a customer service person who speaks adequate English and doesn't burst into violent profanity when you ask for a mortgage modification.
Moreover, the way to punish them for behaving badly is either to regulate the bad behavior, or refuse to patronize banks that behave badly, not to simply walk away from your house loan.
Morgan Stanley walked away from its loans. Really? Really you want me to be indignant about Morgan Stanley's egregious maltreatment of . . . other financial professionals who saw this coming months ago? Companies borrow money under different expectations than people do, which is why it's hard for a lot of companies to borrow money, as you'll find if you ever try to start your own business. The question is B2C and C2B norms, not what businesses do to each other, for the same reasons that I am much more tolerant when stock brokers rip off each other than I am when they do it to their clients. If anyone else had ripped off the greedy financial professionals, the same people angrily demanding that I condemn Morgan Stanley's actions would probably be cheering.