Ethics and Mortgages: How Do I Fit In?

I just read this great article talking about 'strategic default' - i.e. those mortgage holders who default on mortgages rather than continuing to pay for a grossly underwater mortgage.

This paragraph got me:

"Using credit bureau data, consultants at Oliver Wyman calculated how many borrowers went straight from being current on their mortgage to default, rather than making spotty payments. They also weeded out owners having trouble paying other bills. Their estimate was that about 17 percent of owners defaulting in 2008, or 588,000 people, chose that option as a strategic calculation….
In the current bust, lenders first noticed something strange after real estate prices had fallen about 10 percent.
An executive with Wachovia, one of the country’s biggest and most aggressive lenders, said during a conference call in January 2008 that the bank was bewildered by customers who had “the capacity to pay, but have basically just decided not to.”

I realize the Wachovia quote was from 2008, but I'm guessing the last year has only exacerbated the issue.  What are the consequences for walking away from an underwater mortgage?  And what are the ethical ramifications?  If banks are acting in an unethical manner (think about how people view bankers in 2010 versus 2007), are we then allowed to loosen our ethical footing?

Long story short, this is an issue that will continue to drastically influence the housing market going forward.  As much as the government views its job as 'creating expectations of increasing home values', there are too many other actors and influences that will move housing prices lower.