Um, what? Even after itemizing, I wasn't getting back all 6.45% of my interest rate I was paying. I know that's not low, but it's not high, either. I was not getting back the $1700+ I had paid out in interest in 2009. I would not get all $30K back from the interest in 30 years from tax breaks.
I never said the government will pay your interest. I said that with the writeoffs, it approaches the rate of inflation.
You can just walk away, but you can't "total" a house. You are still shackled with the mortgage payment unless you get that insurance. You just have a destroyed property on soggy land that you are paying a house payment a month for. Not to mention the hit you would take for simply not paying it anymore and leaving it with the bank. In a situation your house is destroyed, I would want to keep my credit rating high when I look for a replacement house.
You and I live next to each other in the exact same $250k houses. You pay off your mortgage. I don't. Neither of us have flood insurance and our houses are totaled with water damage and mold. Guess what, I can simply walk away and take the credit hit. You're left $250k out of pocket and with a property that isn't worth anything near that.
Granted this is an extreme example, but a 'feature' none the less.
I'm not talking about lawsuits over the property. I'm talking about someone going after anything you own of value.So far this is a better reason than the others, however, it's pretty darn hard to litigate against someone for property if you have the deed in your hand. It's not the bank that answers surveyor queries. What other land/property lawsuits would one have to worry about?