I saw this in the paper today and thought it was pertinent to bring up, especially since Eben mentioned this issue in class today. Two things about the article struck me as particularly interesting:

(1) The plan being proposed is a "bailout" for homeowners to assist them with underwater mortgages. This is being proposed by Arizona, one of the hardest hit states by the recession. A state hit so badly that lawmakers are considering selling the state capital. Granted, much of the money is federal, but given that programs are being slashed across the state, giving mortgage companies a second bailout, through individual homeowners, seems a bit suspect at best.

(2) Even for those who decide to walk away from mortgages, the decision is a surprisingly emotional one, and people at least claim to consider their neighbors when making it. One woman who has decided to walk away claims: "I pray at church. I feel horrible for what I’m doing to my neighbors". This comes from a single mother with two children in severe economic trouble. While I fully support caring for one's neighbors and considering others, the level of emotion involved is interesting.

Anyway, I figured I'd bring this article up for anyone who is interested. If other people read this, I'd love to hear what you thought.

-- DavidGoldin - 23 Mar 2010

"Even for those who decide to walk away from mortgages, the decision is a surprisingly emotional one, and people at least claim to consider their neighbors when making it."

It is not all that surprising that the homeowners are emotional. Buying a house was not merely an investment decision for these homeowners; the home was an extension of themselves. The homes have value to people beyond their financial worth. To a person, owning a dream home is an affirmation that they have made it. People have a lot of themselves tied up in their homes. The woman who is walking away from her home realizes that by decreasing the home values of her neighbors, she is decreasing their sense of self-worth.

-- JohnAlbanese - 25 Mar 2010