[orangecat]

A loan to an individual is an agreement to repay that according to terms.

Or to not repay and accept the specified consequences.

I believe that there is indeed a moral obligation to attempt to fulfill that contract.

Giving up the house does fulfill the contract. The only debatable point that I see is whether it's ok to live in the house without making any payments while the foreclosure process moves forward, or whether you should hand the keys to the bank right away.