The New American Dream
Apparently it is to stop paying your mortgage when you are upside down and rent. Here is my opinion, a lot of people bought homes they couldn’t afford so yes they are responsible too. However, we are human and make mistakes and I feel this goes back to the book I read, “Chain of Blame: How Wall Street Created The Credit Crisis.” In this book Angelo Mozillo, CEO of Countrywide, said back in 2002 (I believe 2002) “if these weren’t good loans then Wall Street would sniff it out. If you are lending the money you need to take control of the situation and not allow these individuals to purchase.
I am going back to my favorite paragraph from a previous Wall Street Journal article. “If the intent is to help homeowners, then foreclosure is undoubtedly the best solution. Household balance sheets have been destroyed by taking on too much debt via the purchase of inflated assets. With so little savings, a household with negative equity almost implies negative net worth. Walking away from the mortgage immediately repairs the balance sheet.”
This was an interesting comment and probably accurate. “For the 4.8 million U.S. households that data provider LPS Applied Analytics estimates haven’t paid their mortgages in at least three months, the added cash flow could amount to about $5 billion a month — an injection that in the long term could be worth more than the tax breaks in the Obama administration’s economic-stimulus package.”