Fear, shame, and guilt are preventing Americans from walking away from homes when their mortgages are underwater, even when walking away is the best decision, says a University of Arizona professor of law who studied the issue and wrote a paper on managing the crisis.

Home owners should be walking away in droves, writes Brent T. White, an associate professor of law at the University of Arizona.

The real mystery is not - as media coverage has suggested - why large numbers of home owners are walking away, but why, given the percentage of underwater mortgages, more home owners are not, the professor says.

White proposes leveling the playing field between bank and borrower by amending the Fair Credit Reporting Act to prevent lenders from reporting mortgage defaults to credit bureaus.

It is time to put to rest the assumption that a borrower who exercises the option to default is somehow immoral or irresponsible, White writes.

Source: The Wall Street Journal, James R. Hagerty (10/30/2009)