Reply #61: It's the risk you take when you buy a house. Values go up. Values go down.

[moc]

For some reason, we (the American people "we") have gotten the crazy idea that housing values can only go up. Assuming so is naive.

People in upside down mortgages aren't necessarily "victims". They made a bad investment decision. They bought when prices peaked. Just because values declined doesn't mean they don't owe what they borrowed.

FWIW, I'm old enough to remember the real estate crash in Texas in the 80s. I know people who got stuck not being able to sell houses and just had to sit on them until values rebounded. It's one of the reasons why when we bought our house 10 years ago, we specifically bought in a neighborhood that had very stable housing values during that time period.