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Lapel, In | Not everyone would walk, Jack.If the home buyer(notice I didn't say owner) owes $100,000 on a house and his payments are based on the $100,000 and the value drops to $80,000, why not walk away and replace it with the same quality of house with payments based on $80,000. or maybe even less. A 20% drop in value would wipe out any built up equity in any of these sub prime loans and a lot of others as well. Why pay on something that no longer exists? I know it isn't right , but hard times are like that. People will do things to survive that they wouldn't ordinarily do. Personally I think we will be lucky if housing only loses 20%. It wasn't that many years ago when 3 houses in 10 were free and clear according to a statistic I once read. I would guess it is a much,much lower ratio today.
Edited by msb 2/20/2008 21:24
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This guy is good and its bad
