These folks who are thinking about breaking their contracts on the premise of dropping values would scream and sue everyone involved if the reverse situation was true – home prices appreciating nicely and the bank decided it wanted to break their contract and take back the house and sell it for more money. If an contractual agreement is simply a matter of convenience it should hold true that both parties that entered into the agreement aren’t bound by its terms. If people who can afford to pay are allowed to simply walk away for their own convenience and lack of due diligence then the banks have every right to enforce the contract.
My favorite line is from the woman who states: Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense.
I bet you that when the house was appreciating at 15-20% per year she was fine with making a payment like that. But, when she gambled on that trend continuing into the future, and lost that gamble, it suddenly doesn’t make sense.
Man, David Hannum (not PT Barnum who was mistakenly attributed with the famous quote) was dead on, and way ahead of his time – “There is a sucker born every minute!”
