Abandoning mortgage OK? Apparently 36% in U.S. believe it is.

More than one-third of Americans believe it’s acceptable under certain circumstances to stop paying a mortgage and walk away from the home, a survey by the Pew Research Center found.

While 59 percent of those surveyed said its “unacceptable” to abandon a home loan, 19 percent said it was “acceptable” and another 17 percent said it depends on the circumstances, an answer that wasn’t on the survey, said Rich Morin, a Pew Research senior editor in Washington. Of the respondents, 63 percent own homes and 31 percent are renters.

The poll was made May 11 to 31 of 2,967 Americans, including 1,937 homeowners. The margin of error for the poll was plus or minus 2.2 percentage points.

Pew Research is a nonpartisan organization that doesn’t take positions on policy issues.

Homeowners are struggling with their mortgages amid job losses and the worst housing crash since the Great Depression. About 14.4 percent of home loans were delinquent or in foreclosure at the end of June, the Mortgage Bankers Association reported Aug. 26.

U.S. unemployment was 9.6 percent in August, near a 26-year high. Home prices in 20 cities are down 28 percent from their 2006 peak, according to the S&P/Case-Shiller index of property values.

Fannie Mae and Freddie Mac, the largest U.S. mortgage- finance companies, and their regulator, the Federal Housing Finance Agency, “are concerned about borrowers who have an ability to pay but who choose to default on their mortgages,” FHFA acting director Edward DeMarco told a Congressional subcommittee hearing last week. “Strategic defaults not only result in increased losses for taxpayers, but also have a deleterious effect on neighborhoods,” he said.

About 12 percent of residential-loan defaults in February were strategic, meaning homeowners decided not to make payments even though they could afford to, New York-based Morgan Stanley said in an April 29 report. The rate was about 4 percent in mid- 2007.

People who said turning a home over to the lender is acceptable climbed to 25 percent among those who suffered recession-related hardships, such as job loss or problems paying bills, the Pew Research survey found.

Jon Wittenberg, 41, stopped making payments on a condominium he owns in Thousand Oaks, California, two years after he got laid off with about 3,000 others by Amgen Inc., where he worked as a scientist. He moved to Walnut Creek in Northern California, where he now works for a bio-fuels company, and rents out the condo he left behind for $1,300 a month, or less than half of his monthly payments for mortgage, taxes, insurance and fees, he said.

‘Act of defiance’

The breaking point came after months of asking for a loan modification, when lender Wells Fargo & Co. proposed to raise his monthly payments, he said.

“It was an act of defiance,” Wittenberg, who now lives in a rented house with his girlfriend and her two kids, said of his decision to abandon mortgage payments. “I thought, ‘See ya!’ ”

A Wells Fargo spokeswoman, Vickee Adams, declined to comment on Wittenberg’s loan.

Strategic defaults aren’t a significant problem for the San Francisco-based bank, where 92 percent of 8 million home loans are current, said Franklin Codel, chief financial officer at the home-lending unit.

“There are lots of people in this country who are underwater on their mortgages who are paying and doing the right thing,” Codel said in a telephone interview from Des Moines, Iowa. “The hypothesis that everybody who’s underwater is not paying the mortgage isn’t holding water.”

Feeling trapped

About 21 percent of the homeowners surveyed by Pew owed more than their homes were worth. That’s close to the 23 percent estimate in August by CoreLogic Inc., a real estate information company in Santa Ana, California.

“Negative equity is clearly a huge anchor weighing down on the economy,” Sam Khater, chief economist for CoreLogic, said in a telephone interview. “People are trapped.”

Jeffery Horton, 33, said he stopped payments in October on a three-bedroom house and a one-bedroom condo he owns in Winter Garden, Florida. After his lenders refused to negotiate a loan modification, he decided the properties weren’t worth keeping.

“I’m not the first person in history to walk away from a bad deal,” said Horton, who works as a network administrator for a student-housing developer. “To me, the most frustrating thing is feeling trapped.”

Much of this may be caused not just by the negative equity positions in some parts of the country but also by the unwillingness or inability of the Lenders to make loan modification.  Loan modifications are much easier when the loan is owned by a single entity such as a Bank or by FNMA or FHLMC.

However, many loans were made and sold in the secondary market as securities and are chopped up into what is known as tranches.  Think of it like a pyramid.  The people at the bottom are the safest because their loan to value obligation may only be 50 or 60%.  Because their risk is lower they get a lower rate of return.  Those at the top bore the most risk and receive a higher rate of return.

Getting all the parties involved on a loan to agree is almost impossible.  The ones in the safest tranches probably favor a foreclosure because they will likely get their money back.  In a modification or principal write-down they may be ask to share in the losses which there is no incentive to do so.  Thus the modification stalls.