The Wall Street Journal reports from California. “As home prices plummet, growing numbers of borrowers are winding up owing more on their homes than the homes are worth, raising concerns that a new group of homeowners, those who can afford to pay their mortgages but have decided not to, are starting to walk away from their homes.”

“Sgt. First Class Nicklaus Skaggs bought his home in April 2005 shortly after returning to California from a one-year tour of duty in Baghdad. The $455,000 three-bedroom home he and his wife purchased in Vacaville, about one hour northeast of San Francisco, is worth an estimated $285,000 today, well below the $453,000 he owes on his mortgage.”

“The monthly mortgage payment, which jumped after its interest rate increased, is now $4,000, up from $2,980 when he bought the house.”

“He can’t sell his home, since there are few buyers, and he can’t refinance because lenders require a large down payment he doesn’t have. Now, the 18-year Army veteran has decided to walk away from his mortgage. He hopes in a few years lenders see his decision as a unique situation created by the housing meltdown.”

“‘I don’t think that house is going to recover in value any time soon,’ said the 40-year-old. ‘I’d just be throwing the money away.’”

“‘It may not be a big thing yet, and hopefully it won’t be,’ says David Berson, chief economist for mortgage insurer PMI Mortgage Group Inc. But if it turns out to be a significant trend, he says, it means that ‘delinquencies and defaults could be higher than the industry is estimating.’”

The New York Times. “Raymond Zulueta went into default on his mortgage last year. In a declining housing market, he owed more than the house was worth, and his mortgage payments, even on an interest-only loan, had shot up to $2,600, more than he could afford.”

“Carrie Newhouse, a real estate agent who also works as a loss mitigation consultant for mortgage lenders, said she saw many homeowners who looked at foreclosure as a first option, preferable to dealing with their lender. ‘I’ve had people say to me, ‘My house isn’t worth what I owe, why should I continue to make payments on it?’ Mrs. Newhouse said.”

“‘You bought an adjustable rate mortgage and you’re mad the bank is adjusting the rate,’ she said. ‘And sometimes the bank people who call these consumers aren’t really nice.’”

“‘I think I could make a case that some borrowers were ‘renting’ (with risk), rather than owning,’ Nicolas P. Retsinas, director of the Joint Center for Housing Studies at Harvard University, said in an e-mail message.”

“‘There certainly appears to be more willingness on the part of borrowers to walk away from mortgages,’ said John Mechem, spokesman for the Mortgage Bankers Association, who noted that in the past, many would try to save their homes.”

“For Raymond Zulueta, the decision to go into foreclosure brought him peace of mind. Mr. Zulueta said he felt he had let down the lender, himself, and his family.”

“‘But you got to move on,’ he said. ‘I know in a few years my credit’s going to be fine. If I want to get another house, it’s going to be there. I’m not the only one who went through this. I know I’m working the system, but you got to do what you got to do. There’s always loopholes.’”

The Mercury News. “Doug Meek, a middle school teacher who lives in Walnut Creek, is looking for a home for his 62-year-old mother. Meek said that he was a critic of the housing boom and was sure the market would eventually subside, something he told his family prior to 2004.”

“‘My wife and I just kept saving money and waited for this thing to really get crushed,’ he said. ‘I kept feeling pressure. I had three kids in one room. I had no idea the market would go down this much.’”

“He and his wife bought in January 2007, when the market was just starting to slow, saying he didn’t time the market correctly, but he hopes his mother and his brother, who was also looking to buy, will.”

“He found a town home in Concord and made an offer of about $200,000 but hasn’t heard from the owner yet. Meek feels a little vindicated though. A few years ago, the ’same little condo’ was twice the price, he said.”

“People are only concerned about the right time to buy when values may go down, said Stephen Levy, director of the Palo Alto-based Center for the Continuing Study of the California Economy. ‘Previously, there was no timing the market because the price was always going to be higher,’ he said.”

“Levy said that prices are still outstripping wages, a sign of an overvalued market, and to expect additional correction for at least another year. But Levy said that buyers attempting to time the bottom of the market may be …

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