>Interesting article here
>
>http://newsvote.bbc.co.uk/1/hi/business/7529277.stm
>
>I didn't realise that in the US you could walk away from a debt like that and not be pursued. So people are walking away from paying for their house because it doesn't make business sense any more
>
>In the UK people who hand back their keys because they can't afford their house anymore are routinely pursued if the sale of the house by the bank fail to raise the full amount of an outstanding loan.


This is all very strange. Could not imagine such thing is possible at all. Especially not in US.
How about downpayment, how about guarantors ?? Don't they need to have quarantors for the loan ???

Here banks always get their money. One way or another. You can walk away from house or even from country, but you will loose downpayment and/or leave your guarantors in debts
(if loan was for business not a property which is easy to sell/settle) .
Simply because banks have means of repossesing property AND directly taking money from guarantors until balance is settled. It is not all that easy to enforce all that, but law is on the side of the banks not borowers. Bank will not overtake your house even with 6-7 unpaid installments, but rather charge penalties, negotiate, refinance etc.
Any repossesion by bank is almost newspaper wordy because it happens very very seldom. Especially when family/chilldren are involved. Banks prefer being flexible, rather then becoming daily news 'Faigins' <g> But also people are paying.

I wander what is going to happen now with new loans when house prices rocketed sky high.
There will be eventually crush somewhere. Home prices are slighly inflated here as well but still lower then Europe, and almost everybody purchased something. People are paying enormous monthly amounts on installments. Then some of them are greedy, and even stupid sometimes. I know of family who loaned expensive big house, and then ended up renting 2 bedroom apt for 5 of them, so they
can keep up payments by renting their own out and paying on top of it for the mortgage.
What saves the situation (for the time been) is that there is no negative equity here. Home prices are not falling at all. As a matter of fact still rising, but for how long nobody knows.

Bubbly jubbly pyramide is still brewing <g>