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ROBERT SIEGEL, host:

Unlike the Whites, many homeowners who are tens of thousands of dollars underwater have decided that it's just not worth it.

NPR's Tamara Keith introduces us to a woman who is walking away from her home.

TAMARA KEITH: Heather Baker is done with being a homeowner. Last month, she stopped paying her mortgage.

Ms. HEATHER BAKER: Who says that my American dream has to be a home with a white picket fence and all of that?

KEITH: But that's not what she was saying three years ago, when she bought this four-bedroom home in a distant Washington, D.C., suburb. Baker was about to turn 40 and felt like she needed to own.

Ms. BAKER: I was, like, wow, you know, I need to have a home. I need to be in a home. My birthday was in September. I purchased the house in August. So, I got the house before I turned 40, but it wasn't a great investment.

KEITH: Not a great investment, because she figures her $465,000 house won't sell for more than $225,000 now. That's what a house down the street went for earlier this year in a foreclosure auction. Like a lot of people, Baker bought her house with no money down. The mortgage broker she worked with told her she qualified for the loan based on her credit score alone.

Ms. BAKER: He was like, go get whatever house you want. It doesn't matter. And that's pretty much what I did, unfortunately.

KEITH: I bet this is starting to sound familiar. Baker's experience is a classic case of the mixed-up logic that ruled the housing boom. But here's the difference: Baker is solidly upper middle class. She has a good income and can actually afford her payments.

Ms. BAKER: Now I'm looking at the investment part of it. Not just - OK, yes, I can afford this house, but I just don't see it as a good investment.

KEITH: She and two daughters plan to live in this house payment-free for the next several months. Then, before her foreclosure is finalized and her lenders kick her out, she'll move into a rented townhome that's almost as big as her house. She'll pay hundreds less each month, and cut her commute in half.

Ms. BAKER: I hate to sound cold and uncaring and contract-breaking, but I'm really OK with it. I'm actually looking forward to moving.

KEITH: This is what's known as a strategic default. She's giving up her house as a business decision, not because she has to. As we walk around her neighborhood, Baker says she feels bad for her neighbors who bought high like she did and will be left with a foreclosed home on their block.

Ms. BAKER: But I'm not the first to do it. So, it happened right here in this house - um, let's see, the one with the little satellite dish.

KEITH: Not being the first foreclosure on the street made her decision a whole lot easier.

Ms. BAKER: I hope that my neighbors would know that that had a lot of bearing on my situation.

KEITH: And she isn't alone. A recent study by Experian and Oliver Wyman found that 17 percent of the mortgage defaults last year were strategic. Jon Maddux is CEO of youwalkaway.com.

Mr. JON MADDUX (CEO, youwalkaway.com): The majority of the people that call us this year, I would say - and even more so in the last few months - are people like her.

KEITH: For a fee, youwalkaway guides homeowners through the foreclosure process. Baker is one of the firm's clients.

Mr. MADDUX: They've run the numbers. They've done the math. And if they strategically default, they're going to possibly have a better outcome in the end, financially.

Mr. GUY CECALA (Publisher, Inside Mortgage Finance): But it's more than an economic decision. It's a contract.

KEITH: Guy Cecala is the publisher of Inside Mortgage Finance.

Mr. CECALA: And there's liability associated with defaulting on a loan.

KEITH: He says in most states, banks can come after homeowners for the losses caused by the default. And a foreclosure is a black mark on credit reports for seven to 10 years. Heather Baker knows all this, and she's still walking away.

Tamara Keith, NPR News, Washington.

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