non-recourse mortgage

In the states most affected by the subprime mess (California, Arizona, Florida, etc.), a first mortgage is a non-recourse mortgage, meaning that the bank cannot go after you for any deficiency. That's why people are just mailing in the keys. It used to be that you'd have to pay tax on the difference as "loan forgiveness", but Congress did away with that at the end of 2007, so the only downside is having a foreclosure on your credit report. Plus one gets to live rent and mortgage-free for the 6-12 months it typically takes to go through the foreclosure process.

This doesn't apply to refis and HELOCs, which are typically recourse loans.