Let's look at my own situation for a moment. I bought a condo in 2005. I wasn't aware of what the banks were doing with subprime lending when I made this purchase (which is my fault. It is my duty to be informed of these things, and I have since rectified my ignorance).
Anyway, I bought the cheapest condo I could find at the time, and made sure that I could afford the payments easily with my income. The building I purchased in had 72 units. It was a rehab, and all 72 units were for sale. I purchased the 3rd one, which actually made mine tied for the cheapest of the 72. They raised prices 3 times before they had all of the units sold, and I thought I had 15K of equity built into my unit and was very happy in my ignorance.
Unbeknownst to me, the banks (including the one I borrowed with), were giving out loans to people with bad credit scores. Really bad credit scores. People known
for defaulting on debt. They happen to have given many of these types of loans to people who purchased in this building. These bad investments accounted for 23
foreclosures in my building over the last 5 years.
I went from having a condo worth more than what I paid by 15K, to one worth less than what I paid by 70K. Not once have I been late on a payment. If I decide to continue to pay my mortgage, and the value of the property rises an absurdly optimistic amount of 5% each year, the point where my decreasing principle will meet the rising value of the property is 6 years form now. It's a one bedroom I purchased as an investment.
*snip - post has too many characters, must shorten*
So the question is, why should I
continue to lose
money while they continue to profit
off of what is essentially an equally stupid investment on their part?