Strategic Default or Prudent walk-away--Provacative new book on this major financial Step!

I'm looking forward to having Nicholas Carroll on my local Bay Area radio show (northern california bay area!), the "Real Estate Hour", 1350AM, KSRO, Sundays 9 to 10am or at www.KSRO.com streaming. Mr. Carroll self-published a book we ALL KNEW would eventually be written--how to walk away from your debt while saving $1,000's of dollars, getting your financial ship righted and eventually buying another home at TODAY's bottom basement sale prices.

His book, entitled, "Walk Away from Debt for a better Future" begins with these two basic premises which I've taken from his web site: http://www.walkawayfromdebt.com/

 This book prepares you for either of these two goals:
    

1. Walking away from some of your debt, and hanging on to a passable credit rating. This can make sense for people who depend on a credit rating to hold on to a good job, or need one to get business loans – or are hoping to buy a house at today's more affordable prices.

    2. Carrying out a total walkaway with as much cash in pocket as possible (and no lawsuits chasing you).

In goal #1 – since creditors nowadays are a lot more realistic – it can make sense to negotiate the creditors to settlements over a few months. This might be a cram down on the value of a home, or a short payoff on credit cards (20 cents on the dollar is routine these days). You effectively walk away from a significant chunk of your debt with only minor-to-medium credit blemishes – and your credit rating starts rebounding in a few months. (That's correct: months.)

In goal #2 – if credit score is less important than being financially solid – a total walkaway might make more sense: stop paying all creditors, live rent-free for up to two years in your home, if you have one, and then walk away with cash in pocket (people who do this usually regain good credit ratings faster than those who struggle along for years with repayment plans).

This book attempts to show struggling homeowners those options perhaps NOT discussed by attorneys or CPA's. It further explains the reality of the banking system and the default process currently in the U.S. Currently homeowner "retention" seems to be the chant of the big peer banks (BofA, Wells, Chase). To this end  many homeowner are attempting loan modifications (something the book explores) but  were also told to "quit making payments" to effect a modification! They then find out that the banks just let them STAY there with NO payments! QE3?!? Not a bad "stimulus package"!

But what of the folks who CAN make their payment but just don't see their home pricing coming back anytime soon? Why keep making $3500 monthly home payments on a home which is $200 to 400K underwater? Is it "prudent" to just walk-away, let it go into default (eventually!), sock away the savings with the idea of building a new nest egg for a future home purchase say two years down the road?

I know MANY of you can recite stories of clients who have been in their homes in excess of two years with STILL no notice of default filed (here in California,the NOD or notice of default, begins a 122 day process eventually resulting in the property being sold at the County Court-steps to the highest bidder--redemption runs WITHIN this 122 days). These folks, we hope, are saving their money, paying down debt and giving themselves a  nest egg to re-establish themselves in a nice rental. Of course the flip-side--they are NOT saving the money but spending it  like drunken sailors, not caring one iota when the NOD happens and awaiting a fat "cash for keys" check to get out. They also are NOT keeping the property up and are creating an eyesore driving prices down in the neighborhood.

So what say you to this new book? I know you have clients who are up against tough financial times and are straining and clinging to their "HOME". Walk away? Restructure?