I’ve often used Japan as an example as what could happen here.

Lately, I’ve come to realize their may be an important difference. In Japan, for whatever reason, people that could manage to afford their insane mortgages have stuck with them. Or, at least thats the impression I’ve gotten.

Whether this is due to cultural or legal issues, I have no idea.

Here in America, lots and lots of people are just going to toss their keys to the bank rather than become debt slaves. This is going to snowball RE devaluations, as well as force more failures of major lenders.