If you can't pay, there is already bankruptcy for that. Nothing else is needed really. You can't expect to walk away from a loan with zero hit to your credit.

If you can't pay, there is already bankruptcy for that. Nothing else is needed really. You can't expect to walk away from a loan with zero hit to your credit. Also, it is really hard to sympathize with people walking away from huge loans for which they put down nearly nothing. The way things are today, you could severely overpay for a house with a loan that you put almost nothing down for, then walk away when the market crashes. That is not the kind of behavior that should be incentivized. As if that isn't bad enough, the very low down payments allow people to qualify for higher loan amounts, which drives up housing prices.