11-21-2008, 01:33 PM
[quote=GGD]
The one part of the whole subprime equation that I never really understood, is where is Joe going to live after he walks away from the underwater loan/house? [/quote
During the peak housing market, Joe bought his first McMansion in Arcadia (a city known for its numerous butt ugly McMansions) CA. Thinking that he could flip and earn a bigger profit if he owned two McMansions, so he went ahead and bought another one. The housing bubble started leaking air. While he put his two McMansions on sale he managed to get his lender to give him another loan to buy a more affordable townhome. The housing market tank. He couldn't sell his houses for what they were worth. He walked away letting the tax payer holding the bag while he lives comfortably in his townhome, which is now much more affordable for him.
The one part of the whole subprime equation that I never really understood, is where is Joe going to live after he walks away from the underwater loan/house? [/quote
During the peak housing market, Joe bought his first McMansion in Arcadia (a city known for its numerous butt ugly McMansions) CA. Thinking that he could flip and earn a bigger profit if he owned two McMansions, so he went ahead and bought another one. The housing bubble started leaking air. While he put his two McMansions on sale he managed to get his lender to give him another loan to buy a more affordable townhome. The housing market tank. He couldn't sell his houses for what they were worth. He walked away letting the tax payer holding the bag while he lives comfortably in his townhome, which is now much more affordable for him.