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Originally Posted by Sam
I'm referring to working folks that bought a house using conventional mortgages but no longer able to pay because of the economy.
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When you are right-sized out of your job (with no prospects of finding a new one), it's time to right-size your housing as well.
Let's say someone gets paid 1/2 of their previous income from unemployment insurance that lasts 6 months, and they had a few months expenses saved up. Plus they have credit cards to keep them afloat in a pinch. Wouldn't they be fairly well off for a while? Add to that scenario the fact that they can downsize expenses while they are laid off.
I think we can either have easy access to credit and a high rate of homeownership, or strict access to credit and a more landless society. I really don't know which type of society is "better".
Foreclosing on houses when the borrower can't pay is a side effect of our market economy. Imagine the effects if the lender had no recourse to collect most or all of what they are owed on a mortgage. Not only would the guy who got foreclosed on not have a house, but a dozen other folks around him never would have been able to buy a house either.
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