You are right, we should be prepared for a lot more of this especially in 2010 and 2011. Those are the big years for Alt-A and Option ARM resets. If we keep losing 600k + jobs per month that will be a disaster.

And for those above that think these homeowners should sit down and “run the numbers” well,

If they had the energy, knowledge, or desire to do so, they probably would have never done these mortgages in the first place so lets not expect that to all the suddent start happening. Most of them are just going to walk away, easy come, easy go.

My point is you can’t make a walk/stay decision without working the numbers and looking at the alternatives.

Give this guy a break. He messed. He bought Nasdaq at 5000. Now let him take his loss. He should do what is best for himself, that is true capitalism.

http://www.rgemonitor.com/roubini-monitor/255816/the_rising_risks_of_a_global_l-shaped_near_depression_and_stag-deflation

In the post he mentions the thinking by many of the better economists (altough he does mention that Bernanke holds the view also) that the general problem the world is facing is the imbalances in trade and capital flows. The exporting countries like China and Japan have been saving too much, while we have been consuming too much. All though savings in the exporting countries got funneled back here in the form of loans that are now going bad. Until America savings rates get back to historical averages, we are going to continue to have problems.

Charts have recently been showing that America’s savings rate has gone up significantly in the past year.
Roubini points out that the charts do not take into account the enormous decline in assets of many households like the subject one. It’s the flip side of those who told us that we didn’t need to save because our houses were increasing in value. So, our savings have not really increased as much as we think and real savings rates will not go up until value of houses and stocks stop going down.

If the guy had done his homework and checked historical prices, he would have known he was buying into a bubble. You would think someone about to write a 300k check would know better.

Just one more example of a guy who watched too much HGTV and swallowed the NAR’s mindless propaganda. When will people learn that we live in a country that allows people to lie to us to sell us stuff.

Bravo to the person who sold the home to this guy… he or she is probably a trader!

I have a daughter and son-in-law who for years didn’t worry about paying bills on time or just plain let them go. Within the last three years, they have tried to straighten out their lives and tried to get things in order. Their poor credit rating has haunted them wherever they turn. The latest problem has been the economy collapse, which almost made a pool maintenance business he started to improve their lives, just about disappear. They are now living in what I would term a “hovel”. Do you think they wish they had handled their debts better? YOU BET! What I worry about is people, in one way or other, walking away from a stupid mortgages (ARM ‘s or whatever) they couldn’t afford to begin with and being forgiven because they are the poor, mistreated recipients of actions from those mean old financiers. These guys made a killing in a business where people let themselves be suckered into a corner they headed for like lambs.

Also his credit will be hurt, and not just for a while, but for a long time. A foreclosure on your credit report is a nasty thing and it will affect everything else he does credit-wise. Walking away does little for him. At worst he can do a short sale and his credit won’t be hurt as badly as just simply walking away.

Since he is facing a huge increase in his payments, if it was me, I’d default and then seek a refi with a long term fixed mortgage and stay in the same house.