Navydoc, thanks, that was easily your best post ever. Without knowing it at the time, you were in medical school and business school at the same time. Both cost you money and both made you smarter. The people that learn today about zero down arm loans that they can’t afford will lose some money and end up renting, but most will have learned a valuable lesson. When someone gets cancer I feel bad for them, when someone has their house foreclosed on because they were overextended but still has their health and job, I look at it as “their” lesson. I have had many money losing lessons in my life and I always recover, wiser and richer in the end.

esmith, you bring up a valid point but there are some differences. In the non bubble markets that have high foreclosure rates they are a result of employment scenarios or just what would have been credit card debt a few years ago. Without the lax lending standards of the past few years, those same people in the non bubble areas would have racked up huge credit card debts and gone bankrupt. Today’s foreclosures in those areas would have happened but have manifested themselves in another form. The blame is not unrealistic pricing so the cure won’t be falling prices. It’s still a supply and demand scenario and there will be price declines in those areas but not on the magnitude of the bubble areas where that was the culprit. And you are right, there are probably many unqualified borrowers elsewhere as well.