Reply to What I don't get: When people complain that they are drowning because their house is underwater

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Reply to "What I don't get: When people complain that they are drowning because their house is underwater"

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[quote=Anonymous]Let me guess. You bought your house for under $250,000 and its now worth $700,000 or your sold it and now sit on the pile of money wondering why everyone complains about real estate these days because, I mean, let's face it you did your research and bought at the best possible moment anticipating 300% increase in prices over a decade or two. So anyone that bought in 2006 was a complete moron because clearly the markets would crash in 2008 from predatory lending practices bundled as AAA-grade loans. Clearly the professionals at Lehman Brothers, Countrywide, etc saw that coming too but decided to let their companies go belly up.

Since you've been living under a rock, I'll clue you in. Mortgages in 2006 and there 'bouts were given 1) for &gt;40% of HHI 2) no money down and 3) ARMs were pushed or the only offer. So people took out insane loans, had no equity because the housing prices were increasing so fast it would build automatically, and ARMs that reset in 5 years. The best ARMs could potentially price you out in a year, the worse would do that immediately. The only reason why the housing market hasn't absolutely plummeted is because the Fed is holding interest rates a 0%. Guess what happens when that rises? All of the underwater homes with ARMs begin defaulting if they haven't already because they can't refinance or sell and probably can barely afford the mortgage while underemployed much less when the interest rates start increasing again.[/quote]

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