Reply #10: It doesn't make sense that the subprime loan was the cause of their problems.

[laconicsax]

$120,000/year=$10,000/month.
$10,000-$3,125=$6,875

Even if you suppose that 50% of their income went to taxes, That's $5,000/month, which should be enough to cover $3,125/month mortgage payments and leave enough left to live on.

I couldn't read the full article at the link--were they dealing with major medical expenses? Was their annual income not $120,000 when their mortgage went up?

Granted, they had twice filed for bankruptcy, but I find it difficult to imagine that they were simply bad at managing money. What's missing from this that makes it understandable that a family making $120,000/year would struggle with a $3,125 mortgage payment?