The great RE money machine will not do well unless people can write off large loans in this big downturn.
The whole process creates a nice illusion of wealth – RE prices rise and people pocket gains, then prices fall and people walk away and taxpayers pay their losses. No real wealth is created, but it is transferred, using taxes and inflation, from people who are not in RE and who have high incomes/savings, to those in RE (either as professionals or as investors).
Of course the WaPo advice is dumb. Moral hazard has been thrown out the window by our own government (Congress and Admin), and those who still worry about doing what is selfishly immoral, but legal, are being played for suckers. People are being encouraged to be suckers because it leaves more to be gained by the rest. (There are still a few people who are genuinely motivated by the morality or ethics of borrowing money and not repaying it, but their genuine concerns are being misused by the decisionmakers).
