Planned Default? Really?

I went to an FPU Graduation tonight.  For those of you who have never heard of FPU, it's Dave Ramsey's Financial Peace University.  A class designed to help people get out of debt and manage their money in a practical and conservative manner.

Two years ago I went to Tennessee to be trained by Dave Ramsey's team as a Certified Counselor.  As I meet with people familiar with Dave I get many questions.  Tonight was no different.

I was approached tonight with a question I have received before.  "Is it ok to have a planned default?"  The real question is this.  "Is it ok to walk away from my home if it is upside down?"  This is the person who has the ability to pay his mortgage, but does not like the fact that his house is upside down, so instead, they walk away from the house.

This is never a good idea.  First of all, this is a moral issue.  It's not the bank's fault that you bought a home at the peak of the market.  That would be like someone who owes you money filing for bankruptcy just so that they wouldn't have to pay you even though they have the ability to pay.

If you find yourself in this situation, and you want out of your mortgage, then talk to your bank about approving a short sale.  If the bank is willing to let you do a short sale, then you can sleep soundly.