zeropoint, people who aren’t forced to resort to this sort of thing probably won’t – remember, this still ruins your credit score. Most people value their credit score and their reputation more than $100K or whatever number it is. For those that don’t, this is one way to work things out if it’s available to them, which it will probably be on a very limited basis for the reasons I presented.
sdrealtor, I basically agree. People are amazingly resilient when backed up against the wall. Sure, lots still implode, but most figure a way out of their mess without blowing everything up around them. I still think things are going to get very ugly, but I discount the views of the armageddoners here pretty heavily. There are too many moving parts of which we are unaware and they tend to make the doom mongerers look silly in hindsight.
I’ll share but one example to make a point: I know of a friend of a friend who’s in trouble financially (he has a bad mortgage that’s resetting). Well, guess what, his parents are helping to bail him out. They’re not super rich but have the resources to stage a small rescue. There are a lot of people in houses they can’t afford who can tap parental/family resources if they MUST. I’m sure they don’t want to go down that road, but it’s available in a pinch to a lot more people than we probably are aware. But it’s something people here rarely put into their calculations…
