If the Fed can basically ruin the value of the money I’ve saved and invested over the years with their bail-out frenzy, why should I pay back a loan that’s $200K more than the value of the house it’s against? Ability to pay has little to do with it. It’s a business decision, kinda like the decisions they make on Wall Street!!
There’s really a lot of incentives for people who are upside down right now to walk away. The gov has a tax reprieve on the forgiven debt this year, home prices keep falling and we’re in a recession. And as someone stated in an earlier post, rebuilding a credit score is a lot easier than accumulating the $200K I just lost in my house.
