What's rationale of giving up home that's less the value of the mortgage? Won't value rise in the long term?

There's been much debate about people giving up their homes (i.e. returning keys to bank) because the house value is less than the mortgage. But what's the rationale? Won't the value in the long term rise again and exceed the mortgage? Also, by paying off the monthly mortgage, the amount owing to the bank will reduce anyway, benefiting the owner.What's rationale of giving up home that's less the value of the mortgage? Won't value rise in the long term?
You are correct - If you can make the mortgage payments and hold onto the house, then in the long term you will probably do OK.








But some people can't afford to make the mortgage payments. There can be many reasons for this, including people who lost their job. Another reason is that their adjustable mortgage payment went up, and they can't refinance because their house value went down (i.e. the value of the house is less than the amount of the loan).








Someone who absolutely can't make the mortgage payments, or someone who absolutely has to move (for example, to take a job in another city) will have to sell the house in order to pay back the loan. But if the loan was (for example) $300k, and the house sells for $200k, then they owe the lender $100k in cash in order to pay off the loan. That is a lot of cash.








The loan agreement was that you pay your mortgage, or else the bank gets the house. Well, some people just say to the lender, I can't pay the mortgage, just take the house. This does not always let the person who defaults entirely off the hook, but if they do not have significant income or assets, there is little the bank can do to recover anything.








Anyway, this is the rationale.What's rationale of giving up home that's less the value of the mortgage? Won't value rise in the long term?
There is no rationale to what these people are doing. Your approach is the correct approach. For some reason, many people view or viewed their personal residence as a real estate investment. It's not. They bought a place to live. Investment real estate is other than the residence in which on resides.