95% correct. I consulted with a friend of mine on this, since I am the "strategist" of my group of friends. Even if you make a high income, mortgage debt is secured debt. They can surrender the property in full satisfaction of the loan. Of course if there is unsecured debt too, that would be added to the plan.
I'm not a bankruptcy expert, so I'll take your word for it. I do find that somewhat surprising though, given some of the Chpt 13 plans I have seen. But then again, in almost all of those that I have seen, the debtor wanted to keep the house (they didn't get the principal reduced to the value though). Due to the nature of my job, I primarily see these in the context of bankruptcies spurred by commercial loans secured by a mortgage on the house (and lots of credit card debt).
The debate over morality in these things is interesting to me. I feel that banks, companies, goverments etc will always choose the path that gives them more and you less... so why should anyone feel compelled to do otherwise. An example.... Banks make more money off of "Free Checking" then they ever made before, because of overdraft fees. They figured out a way to lure the less credit worthy and less-weathy, and dig into their pockets... legally of course. If this is accepted behavior then why not bankruptcy? If this is unacceptable behavior, then why would you treat an entity better then it is treating you?
I'm not trying to impose my morality, just stated my opinion of it. Others are free to think otherwise. And it is perfectly legal. I just don't think it should be (especially if what you say above about turning in the property as full satisfaction). Though, I don't often use the "the other guy would do it to me, so I can/should do it to him" line of thought.
The obligation was signed for, yes. But, and its a big BUT, part of the contract is the governing laws of the land. In this case, bankruptcy laws.
No argument there; see above about what I think it should be.
Would you avoid using a clause written in your mortgage contract that would allow you to 'walk away' free and clear? Or would you use it? Is it the fact that its not part of the mortgage document that is the hang-up, or something else?
I think I can sum it up with the following: I believe in keeping promises whenever possible, not just when it is convenient for me, and breaking them otherwise. Again, that is just my opinion.
Edit: I would add one question: If you go to apply for a new home loan and tell the banker "I'll make the payments unless the property drops in value, in which case, I'm walking away and declaring bankruptcy." Do you think you'd get that loan?