What is the lender going to do, break your legs if you can’t pay?
The house is the collateral, so I expect most folks will just toss the keys and walk if they can’t make the payments or find a buyer. The bank the sells the property for whatever they can get, keeping what payments have already been made. Not a loss for them in the short term.
Note thats its foreclosure sales that can deflate a market in a hurry. The bank has no emotion involved and just wants to liquidate the asset as soon as possible.
I’m not sure this could lead to deflation, unless the supply exceeds demand by so much the prices really go in the toliet. Always possible, though.
My question is what sort of consequence this will have on the FB. Bad credit? Bankruptcy?
