If you’re in Princeton, New Jersey, anytime soon, swing by the Hyatt Regency Princeton. With the Hyatt Hotels (H) quarterly report filed yesterday, it has become a symbol of the financial crisis — and of a some stark contrasts between business and personal debt in the U.S.

Like households across the country, one of Hyatt’s subsidiaries “did not have sufficient cash flow to meet interest payment requirements under its mortgage loan” on the property, in this case a 347-room hotel with a restaurant, bar and comedy club, just a mile from the famous university. The scenario sounds familiar after years of news about the still-struggling housing market.

At the same time, the Hyatt subsidiary was under-water on its mortgage, or, in the formal language of the 10-Q, “the appraised value of the hotel was less than the outstanding mortgage loan.”

Now, Hyatt, the parent company, has felt the sting of the recession like other hospitality companies, but it’s not like it lacks resources. As of June 30, Hyatt had $1.17 billion in cash and cash-equivalents on its balance-sheet. It reported revenues of $889 million for the quarter, and net income of $25 million, or 14 cents a share.

Just like plenty of American families, Hyatt has to decide where to put those resources. And it has decided it’s not worth throwing good money after bad at this particular property, presumably because it doesn’t expect the hotel to recover in value any time soon.

“When hotel cash flow became insufficient to service the loan,” the company said in the filing, “HHC notified the lender that it would not provide assistance.” In other words, Hyatt decided to walk away — the equivalent of “jingle mail,” when homeowners pack up, move out, and mail their keys to their mortgage servicer, abandoning both the house and the loan with which they bought it.

In Hyatt’s case, the company

“and the lender agreed in principal to effect a deed in lieu of foreclosure transaction. We expect to complete transfer of ownership of the hotel to the lender within less than one year. As a result, we reclassified $45 million in long-term debt to current maturities.”

It’s a business decision, and it’s not terribly remarkable, in one sense. Companies across the country are doing this constantly; it’s a more or less accepted part of commercial-mortgage default. Homeowners, by contrast, have historically been more reluctant to simply walk away — Americans by and large don’t abandon their debts lightly.

That may be changing, of course. We’ve heard plenty of stories about homeowners walking away — thinking, and acting, more like American businesses. But here’s a difference: We doubt Hyatt will have trouble getting a loan after this.

By contrast, the companies that make and manage their mortgages aren’t always willing to cut a deal like the one Hyatt got — especially if they think the homeowners could in fact pay up.

And, as Bloomberg’s Lorraine Woellert notes in this June article, Fannie Mae — which with Freddie Mac backs a huge proportion of U.S. mortgages — is warning that homeowners who do the same thing “will be banned from obtaining new mortgages backed by Fannie Mae for seven years from the date of foreclosure…” Here’s the reasoning:

“Walking away from a mortgage is bad for borrowers and bad for communities,” Terence Edwards, Fannie Mae’s executive vice president for credit portfolio management, said in the statement. “Our approach is meant to deter the disturbing trend toward strategic defaulting.”

Image source: Hyatt website

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