Posted Thursday, January 28, 2010 12:00 PM
Im not a financial expert, but I try and follow this stuff to the point that I can talk intelligently about it.
I dont understand how the stock market goes up, while jobs go down and more importantly housing has the land mine of strategic mortgage defaults on the horizon exploding.
This is a good article about it.
Estimates are that between 20% and 33% of homes are underwater. I believe that the shame and guilt of the homeowners are what is keeping them paying their mortgage - but I do also believe that that is wearing away - and more and more will just make a financial decision to walk away from their homes - effectively ruining the housing market which in turn will sour the economy.
These are not people who cant afford to pay their mortgage - these are people who simply CHOOSE not to pay their mortgage based on a smart business decision - sell their good credit for what could be hundreds of thousands of dollars.
I have a buddy who bought a condo 3 years ago for 200K, and it is now worth 35K. I went through the process with him over the last year - at first he was sure he would pay, then he started wondering more about it, and just last week he decided to walk.
Does anyone have thoughts about this? I cant see how the economy can possibly recover... [More]