If everyone that’s upside down on a mortgage were to stop paying, this would put the banks in a very difficult position. The banks would lose this cash flow. BUT would they start issuing NODs and actually follow through to foreclosure? Actually following through on foreclosures would eventually force the banks to Mark these assets to market. So, look at the checkmate position the banks are facing. Cash flow coming down and assets are being marked to market. This will probably collapse the system as so many mortgages are upside down now and more are being created evey month.
This is an end-game situation. Now the only question is, how long will it take?
