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][quote]This is exactly what it is, when you are living in a home that has lost its value, you cannot sell it and move when you need to unless you lose a good chunk of your hard earned money. This is not gambling or in any way comparable to putting your money into the stock market. These people did not intend to flip and get rich fast, [b]they just wanted to do what people did for generations here and keep even, but they are not[/b]. Actually in the stock market you are much more liquid and don’t need to go through the drawn out process of selling your property, which is both expensive and emotionally and physically draining. People who lost in the market can at least get out what is *left* without nearly as much work and cost as eliminating RE. [/quote]

Actually, for generations and generations, people bought a house and stayed in it.  MAYBE they upgraded once.  They bought and held real estate for a long time, which allowed it to appreciate slowly, and at the same time they paid off the mortgage, so at some point they owned the house free and clear (regardless of what it was worth).  And that is EXACTLY what would happen today - if people paid down the mortgage and didn't worry so much about what the assessment is worth.  This brings us back to the OP's question, by the way.  Homeowners who can make their payments aren't "drowning" because they're underwater.  Sure, they lack flexibility, but that's not the same thing.  Drowning means your income can't meet your obligations.  But inherent in the question is that the homeowner CAN meet her obligations, but is stressed because her house is worth less than her mortgage.  Which stinks, but isn't a good reason to modify the mortgatge, in my opinion.

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