Tess Vigeland: Bernie and Joyce Murphy are still convinced that they did everything right when they bought their home. And by all indications, they did. Four years ago, the couple, who have been married 41 years, moved from a small town in Ohio to Stallings, N.C., just outside Charlotte.

Bernie Murphy: Alrighty, we will get you some water here. You look like a country girl. Already, she looks like she fits right in.

Vigeland: I'll take that as a compliment.

Bernie: Oh please do!

The Southern hospitality started there in their lovely two-story town home and lasted through breakfast treats and several cups of coffee.

Bernie: Now we're very informal here, so what I'm gonna do is probably just set everything on the table. All right, let me see here, I'm gonna grind these up.

Bernie Murphy is 65 and retired. He spent two decades in state government in Ohio and another two before that working at a university. Joyce is 64 and works full time as an administrative assistant at a private school. They saved up, put 5 percent down on their $160,000 town home and got themselves a plain vanilla 30-year mortgage.

Bernie: Little did we know that within 24 months after we bought this place that this whole artificial bubble would explode.

A recent appraisal put the home's current value at $125,000. They owe $148,000. They are now underwater. And based on what's happening around their housing development, the worst may be yet to come.

We headed out for a walk around the neighborhood. A small creek runs through the tree-lined development, where model homes have names like "Riverbirch" and "Magnolia."

Bernie: This is the unit here that went for 50 cents on the dollar.

Vigeland: Just three doors down from you?

Bernie: Yeah!

Vigeland: Do you have any sense of how many of these homes might have been either foreclosure or...

Bernie: I know that one. I think this one up here is a foreclosure. Hi there!

Those homes are now pulling down the price of the Murphys'. What that means, they say, is that if they wanted to sell tomorrow -- even next year -- it's not likely they could. Not that they want to move any time soon. In fact, their plan was to stay in these 1,700 square feet for another decade or so before moving to a retirement community. But their planning for this move was so thorough that they even weighed whether to get a home with stairs.

Bernie: >Normally, people our age or my age wouldn't buy a two-story, because you never know when your knees are going to go or whatever, and you know, steps can kill you. I mean, steps can be hazardous. Our plan was hold onto it for 7-10 years, get rid of it. That is out the window now, 'cause I can't get my money back in 7-10.

But for all their frustration, they will not join the ranks of those who walk away from their underwater mortgages. Joyce Murphy -- who manages the family accounts -- says it doesn't make any sense to them.

Joyce Murphy: If you walk away, then what do you have? You would be in worse shape than if you just sit there and take it. You know, basically.

Vigeland: What are the thoughts that go through your head when you write that mortgage check?

Joyce: Well, I just try not to think about it.

But in many cases, the math argues that it doesn't make sense to stay in the house. Brent White teaches law at the University of Arizona. He says this is simple contract law. You either pay the mortgage or the bank takes the house. So underwater home owners should make what seems like a fairly simple financial decision.

Brent White: If they don't default on their mortgage, they're going to pour their disposable income into a toxic asset, not have money to retire, and perhaps not have money to put food on the table. On the other hand, if they default on their mortgage, they find that they let go of hundreds of thousands of dollars of bad debt and are able to get back on their feet and to recover.

Of course, it's rarely that simple. Emotional and psychological factors play into the decision to walk away -- just as much as financial ones. And a default can lead to a serious whack to your credit score. Fair Isaac, which provides the industry-standard FICO credit score, released a study this year showing that scores drop by an average of 100 points or more after a foreclosure.

The Murphys say being underwater does mean they've had to go to financial plans B and C. But they're quick to say others have it much worse than they do.

Bernie: God love 'em. the people who make the decision to walk away, they're suffering because that goes against everything that they have ever been taught. It goes against the entire national psyche.

Joyce: And the family that we saw walk away here, they were devastated.

Bernie: They were so embarrassed, they went in the middle of the night.

The Murphys can afford their monthly mortgage payment. But because they can no longer count on making money when they do sell the house, they're changing their lifestyle to save more for the future. They hang on to a hope that the market will recover someday. And for Joyce, it's also about loving where she lives.

Joyce: When you're writing that check, even though you know you're underwater, you know you're writing it for your home. It's still your home.

Technically, of course, it's not. The bank owns it in full when someone has no equity or negative equity. But that sentiment may be what allows home ownership to stay part of the American Dream. A shift away from the house-as-investment mentality that persisted during the bubble.

Bernie Murphy: We may have to live here for a long, long time. But you know what? I got the patio out there, I got that gas grill, and I'm just... if you can't get your hands around it, why sit and pull your hair out over it?

Bernie Murphy is part of the Public Insight Network. If you would like to be a source and share your story about your home, please go here.