I have absolutely no experience with this, but I do know that the bank would rather have 50% of something, than 100% of nothing.
And, working with the bank has the added benefit of not harming your credit.
Walking away from a mortgage, while the chic and trendy thing to do, will destroy your credit for a long time. In this day and age, when companies run credit checks as a part of the employment process (this I *know* happens, I do have experience with it) ... wrecking your credit has long term consequences.
Additionally, the company I work for runs credit checks (and drug tests) dead *last* in the hiring process, just as a matter of routine. If this guy trashes his credit before actually walking on to the company premises and starting to draw a paycheck, he may find himself out of luck.
Just my $0.02.
If I have to choose between destroying my credit (for a time) and wiping out my mortgage debt, or adding $200,000 to $300,000 to my debt, I’ll choose the former every time. That is the choice a person that is seriously upside down in their mortgage is making.
Companies started checking future hires’ credit back in the 80s. I worked for a company that forced me to fire a woman two weeks after I hired her. They checked her credit after the fact. I wanted to resign in protest but couldn’t afford to.
As for walking away from a mortgage, a man’s gotta’ do what a man’s gotta’ do. And I wouldn’t feel guilty about it. As far as I’m concerned somebody got paid for those mortgages with the bail out money from taxpayers. So anything they get today is profit.