> are not most contracts written in such a way that the
> homeowner owes the mortgage regardless of his/her equity
> (if any)?
It depends on whether you have a recourse or non-recourse loan.
http://en.wikipedia.org/wiki/Nonrecourse_debt
In many (most?) states, initial primary mortgages (google for "purchase money") are non-recourse; most refinances are recourse loans. As usual, IANAL and if this matters to your personal situation, seek qualified legal help :-)
/jordan