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While at the end of the day I don’t think people should be bailed out, I don’t agree that everyone who over paid is a speculator. Many people are just wanting to own their own home. The market has been crazy for the last 5 years. Many people are just buying to own not to flip it for a huge profit. So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them.

For the person who ownes multiple houses and buys simply to rent and flip a profit well I have very little sympathy for them. They are the true speculators.

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> So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money

That's not how mortgages work (in the US, anyway). If the value drops, nothing happens, you still have the same house and same mortgage.

I've been underwater twice, in the same house, as prices go up and down over the years. As long as you still like the house and want to continue living there (I did), being underwater doesn't mean anything.

That's the catch, though. What if you wanted to move? That would have sucked. What if you had to move? That could have been disastrous to you. What if you had lost your job, and defaulted on the loan. Apparently most states in the US are non-recourse, so how would you feel when your next job's wages are garnished, or there's a lien on the next home you buy?

When you have to put an "If" in front of "being underwater doesn't mean anything", then that means sometimes it really does mean something.

Where do those ifs stop? What if you went blind in an accident? Some things are just disasters, you can't count that for optimising the majority of the system. Of course you can have support for poor people but that will obviously not match the 400k house lifestyle.

> So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them.

I feel a little sorry for them but they are not missing the money total of "the whole house". They can sell the house, have a shitty $100k debt, a tale of woe, and hopefully a better idea of how to go about spending money they didn't have.

I feel there are too many people who "borrow as much as they can for the best house they can get" rather than being sensible about their money and using a mortgage as a hedge against paying rent and future rent raises. Some of them make it, some of them don't.

we’re talking about wiping out most of the stored wealth of roughly a quarter of all homeowners here. and they cannot take that home with them when a new job opportunity comes up or worse get fired/sick.

this sounds more like a suicide pact than a plan.

Is it great? No! It's certainly not an outcome I would wish for anyone. I'm not a monster.

But there's two things here:

1. allowing people freedom to make their own choices.

2. the dangers of borrowing large sums of money

Adding those two together in a free(for some notion of free) market means there will be losers. In this case, the outcome sucks but it isn't like they lost their life in a car crash.

If you start guaranteeing outcomes... that way madness lies.

> So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them.

I don’t understand this point. If you’re paying the mortgage, the bank dgaf. Is there some sort of margin call a bank can claim on a house that is worth less than it was when it was purchased?

Don’t you just pay the mortgage you agreed to pay the bank?

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