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Of course, while the heavy coverage is of middle class strategic defaulting, the highest rates of strategic defaulting appears to be at the top rungs of the income ladder.

It is, after all, not a personal loan but a mortgage: the penalty for not paying is losing the property that is collateral. If everyone originating a mortgage held it until maturity and expected to own the property if they lent ended up under water ... the housing bubble would never have inflated in the first place.

And indeed, at least in the US, all the property that was sold at asset-inflated prices was valued as being worth the mortgage by a professional valuer.

Indeed, on the "toys" analogy, the improper behavior would be someone who, knowing that they are going to default, lets the property run down. Just because you are walking away from a mortgage does not mean you should behave irresponsibly: mow the lawn, call the utilities to turn off the connections, and clean the house out properly before you walk away.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Aug 24th, 2010 at 05:29:12 PM EST

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