(Ignore the $ typo at 52 seconds in the video - $2 million in loans would be only 3-4 houses in the middle class areas in NJ - should read 2,043,600 loans.)
Now lets take a look at the accompanying article -
More than 2 million prime mortgages, traditional loans for people with good credit, are now delinquent. That's 624,000 more than this time last year, according to the mortgage bankers foundation, Tracy reports.
It used to be if you couldn't afford your mortgage you could always try to refinance or sell your home and pay off your loan. But these days, for a lot of people, those options no longer exist.
That's because 12 million households now owe more than their homes are worth, according to Moody's.
Homeowners with risky adjustable rate mortgages are getting help from banks, but there are no programs to aid those who already have good loans but no jobs.
"If they don't, I'm not going to drain my savings, I am not going to drain my 401k, I am going to walk away," [recently unemployed, Judy] Jones says.
We have predicted before that walking away will gain popularity. As the huge number of foreclosures increases the stigma is fading. It is not looked on as an individual issue - it is now viewed as a systemic issue. Additionally, rational people will not just throw their savings away. Why drain your retirement or savings to pay off that an extra $200,000 on a mortgage than your house is worth? Why lose everything just to lose your home? For many people walking away is the best financial and personal choice they can make. It may be in their best, individual, interest.