Home Underwater? Walk Away from Geithner's Perverse 'Homeowner Relief' Plan

By Zach Carter, AlterNet

Posted on February 10, 2010, Printed on February 11, 2010

The homeowner relief plan adopted by President Obama and Treasury Secretary Timothy Geithner has not been working for a full year now. What's worse, as the program is currently structured, its chief benefits accrue directly to the nation's largest banks, leaving troubled borrowers to twist in the wind. But despite the administration's indifference, underwater borrowers can still take matters into their own hands. If you owe more than your house is worth, just walk away.

"The rational thing for these people to do is to send the keys to the bank and say, 'Good luck,'" says Dean Baker, co-director of the Center for Economic Policy and Research. "Every month that you keep that person in their home paying that mortgage, that's a gift to the bank. So if you could keep a lot of people from sending their keys to the bank, and keep sending their checks instead, that helps the banks directly."