[HeyLaughingBoy]

> the less incentive owners have to continue paying

People keep saying this, but the only time they can come up with examples are when the owner wants out of the property. In the case of a home loan, being underwater is meaningless if you're not going anywhere. Most people will continue to pay because they need a place to live. I have yet to hear of someone who was underwater on their primary home loan and decided to stop paying it and default just because. For an investment property I could see that happening. For the house that you plan to live in for the next 20 years? No.

[TuringNYC]

>> People keep saying this, but the only time they can come up with examples are when the owner wants out of the property. In the case of a home loan, being underwater is meaningless if you're not going anywhere. Most people will continue to pay because they need a place to live. I have yet to hear of someone who was underwater on their primary home loan and decided to stop paying it and default just because. For an investment property I could see that happening. For the house that you plan to live in for the next 20 years? No.

Only if you have a real choice. Reasons people will default:

- Divorced, force seller; especially common as finances go downhill

- floating rate on 2nd mortgage/HELOC is no longer affordable

- Lost job, have no money to pay mortgage. defaults

- Job change with lower income. Have money, but not enough to keep up with payments

- property taxes re-assessed, no longer affordable. tax liens pile up on home