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]This is actually a fascinating and personal topic to me.  We were stationed here in 2006, started trying to buy in 2008 after watching the market carefully for some time, and were successful in 2009.  We read the Virginia Housing Bubble blog obsessively, made spread sheets and trips to the county records office, and came to know local real estate better than most.

Our friends who bought between 2002-2007 did so because everyone told them "buy now or be priced out forever.". They took all of their savings, borrowed from family, got first and second mortgages, and bought the most house they could at the time, often with ARMs, hoping to move before the rate reset.  Many bought new construction.  Some refinanced to consolidate debt.

Out here in PWC, entire neighborhoods lost 60-70% of their value.  My friends are not underwater $50K, they are under $250K.  They have no equity, they can't refinance, their families have grown, and they can't move.  They are killing themselves to keep up with the payments while their new neighbors pay less than half for the same house every month.  These are not McMansions, these are townhouses and cute(?) little pop-ups with no basements or no garage or no yard or no privacy or no personality or no granite countertops.  So I think that counts as drowning.

They followed conventional wisdom, tinged with hysteria.  They tried to make the best decisions for their families.  They lost.  And you should see how poorly they are treated by the banks that threw money at them a few years ago when they try to improve their situation.  Tragic.[/quote]

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