Quote:
Originally Posted by ranchlandsselling
It's interesting, consider what you'd do if housing dropped 30%. Let's say your house was worth $550,000 at the peak, drops to $385,000.
Personally if I had my same job and felt relatively safe in my employment status and could handle my mortgage at existing/future rates. I'd take my mortgage (which most are generally portable) and upgrade houses. Go buy a new house at the same LTV that my prior purchase was at. Your old house value at $550,000 would be able to afford a house that was previously at $785,000. Obviously coming up with a downpayment might be the biggest issue. But if you're taking your debt with you, you don't have to come up with any cash to "pay out an underwater mortgage".
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While I agree with the logic, this analogy mixed with Red's Warren Buffet quote, makes me think of a naked guy swimming out into deeper water to prove he has it all under control...