People make economic decisions every day. Whether or not to buy that new dress, or to go on that vacation, or to order dessert with dinner, or whether to ask for a raise or look for a new job.
The millions of underwater homedebtors, especially those who put no money down and are therefore simply renters already, are slowly and surely going to make the economic decision that they're MUCH better off getting away from their debt-trap. Morally, it's wrong. But economically, it's right.
Many will try to sell for a price based on what they owe, and not what the property is worth, and they will fail.
Many will stay only as long as their teaser rate stays unchanged, and then they will bolt.
And many have already stopped making payments and will stay until foreclosure.
But the truth remains that economically speaking, these homedebtors will be better off turning in the keys. The Bush/Paulson/Banker plan isn't about helping these homedebtors. It's about helping the banks and bondholders who hold the bag.
If they were truly concerned about the homedebtors, they'd be advising them to stop making payments on the depreciating house they couldn't afford anyway. But they're not - they're concerned about the banks.
Since they won't give the correct financial advice, I will:
STOP MAKING PAYMENTS, ENJOY A FEW MONTHS OF FREE HOUSING, AND GET READY TO MOVE TO A PLACE YOU CAN AFFORD.
YOU ARE NOT A "HOMEOWNER". THE HOUSE IS NOT YOURS TO LOSE. YOU WERE LIVING A LIE, LIVING BEYOND YOUR MEANS, AND NOW IT'S TIME TO FACE YOUR FINANCIAL REALITY.