Country Creek was owned by a couple of realty agents, wasn’t it? If they were among those agents who subscribe to the NAR party line they wouldn’t have believed their chances for loss would be real. The whole experience of both losing their income and their house would have literally caught them by surprise in the face of all the information they had been fed to the contrary.
I don’t know what the real answer here is, I’m just speculating from the outside.
You know how it is with people who are overextended. In an effort to maintain their dream some of them will sacrifice everything else to keep the house. It only goes NOD when they can’t get within 2 months of being current on their payment. When they list the house for sale a person in this position probably has no cash or credit to bring to mitigate the deficiency close enough to enable the lender to agree to a short sale.
The bank may not want the house but they want the $50,000 loss even less. Attitudes among the banks vary greatly, from conservative to agressive. If their managers and economists are also toeing the NAR party line the bank may not even be that attuned to the true state of the market. None of us can be any smarter than the people and data that we choose to believe.
