I sincerely doubt that Ohio ever became a bubble market or that those borrowers all paid so much for their properties they are underwater in terms of price. So at least part of the “prolonging the inevitable” argument is going to be different there than here.
There probably are some borrowers who wouldn’t have qualified under conventional terms, but when they go to sell they shouldn’t cause huge losses for those lenders beyond what normally happens when a lender lets a house sit vacant for a couple months. It may not even have much of an effect on pricing for everyone else there.
Of course, that doesn’t speak to the inequity of forcing the many to pay for the mistakes of the few.
