Walking away from a mortgage

Alright, first time on this site. I have a question for all you gurus. I work with two people who are talking of walking away from their mortgages. I've been told that doing so means you don't have to pay back your loss.  I've done a little research on the internet and have found that to be true as far as everything i've seen.  I believe their credit would be messed up for awhile and most articles have said that.  So.... my question is, do they have to pay back their losses for the difference in what the house sells for as opposed to what they owe on it?  I believe the banks are ultimately hurt by this.  Next question, who is hurt by this?  The government, the banks, citizens???  Anyhow, I completely disagree with the walk away thing.  It's a violation of contract and I don't understand how people could live with themselves knowing they are screwing somebody over (if that is true).  Thanks for your input.

They can do a short sale or in lieu of foreclosure. The first one is when the house is sold for less than is owe and banks agrees to the sale taking this route does not damage your credit.  The second is when an individual willingly walks away from his mortgage allowing the foreclosure process o be faster; Consequently, the credit will be damage. It is a hard road to recover or repair credit but it can be done.  As far as who losses? We all do. our 401K, pensions, any type of savings, college savings they all have portions invested in the mortgage industry at the long run we the people are paying the prize. Have they try to refinance? Why are they walking away from their homes?

Hope I answer some of your questions!!!