[quote=jpinpb]But with nothing to lose, they can walk. I just read about strategic walkers. With the way it’s set up, seems like a neverending problem.[/quote]
It’s only a problem for future taxpayers. They haven’t gotten the bill yet, so they haven’t said much.
But the system of non-recourse loans with little money down does achieve one goal: it puts paid to any concerns about unstoppable deflation. It also enables existing homeowners to get out at a higher price than they would otherwise. Homeowner A sells a home to Buyer B, receiving $500,000 that A gets to keep. Buyer B gets to default/mod, ultimately paying $300,000 for the home. How can Homeowner A walk away with $500,000 when Borrower B only pays $300,000? Because Future Taxpayer C is made to pay the extra $200,000. Great system, for A! Not so good for C.
