1) Who ultimately holds all the debt? Chinese Bond holders? American Bond holders? Banks? Mortgage Companies? To put it another way what nations and institutions would be most stressed?
All of them, probably the foreign banks would be most upset if it “did” meltdown and our US dollar took a dive.
2) What happens when a homeowner who is significantly upside-down (let’s say $75k) declares bankruptcy? With the new bankruptcy laws is he/she likely to be told by the court “you will need to keep paying on this?”
If people do not refinance they can walk away from the home without recourse except on credit. Once they refi or HELOC (home equity line of credit-home ATM), banks can take them to court and actually have peoples wages garnished to where you can never get rid of it like taxes.
3) Tell me anything of interest about the financial ripples of a meltdown.
A meltdown in homes where you could pick them up for 100k means that 80% on this board would be jobless and paying 400% more in necessary consumption goods (energy, food, and gas). A price reduction and small recession would be ok but a meltdown I do not hope for.
