[quote=werewolf34]Mortgages are non-recourse loans, period. In the interest rate, they’ve have priced (or forgot to price) the risk that people walk away. [/quote]
State specific laws vary on recourse vs. non-recourse, and even CA is a recourse state when it comes to non-purchase money loans. That said, in CA, you rarely see judicial foreclosures (that allow for recourse) due to costs and the likely inability to collect on a judgement. But they do happen. Mainly when lots of assets are identifiable.
But, that’s sort of irrelevant when we’re discussing what should be done not what is happening. And what should be done is the players at all levels being held accountable for the things they can control, including buyers.
It’s not even a question of personal responsibility to me. You can’t teach that through policy – you either have it or you don’t from your upbringing. Too many buyers with lots of assets are walking away from homes and this is the one of the many areas we need to address so this problem doesn’t happen again. To say we shouldn’t try to address it is illogical to me.
