We know a lot of people though who sold their old house at a giant unbelievable profit and bought a McMansion.  I don't see that as losing 20% of hard working money down.  It was all bubble profit.  Now they may lose the down payment on their initial home before everything went wild ten years ago....such is life at this point.

The anti-government fervor infusing the 2010 elections represents a political triumph for the Kochs. By giving money to "educate," fund, and organize Tea Party protesters, they have helped turn their private agenda into a mass movement. Bruce Bartlett, a conservative economist and a historian, who once worked at the National Center for Policy Analysis, a Dallas-based think tank that the Kochs fund, said, "The problem with the whole libertarian movement is that it's been all chiefs and no Indians. There haven't been any actual people, like voters, who give a crap about it. So the problem for the Kochs has been trying to create a movement." With the emergence of the Tea Party, he said, "everyone suddenly sees that for the first time there are Indians out there--people who can provide real ideological power." The Kochs, he said, are "trying to shape and control and channel the populist uprising into their own policies.

The story also pointed out that banks are very reluctant to foreclose on and evict people in expensive neighborhoods. The banks fear the costs of upkeep and the danger of lowering prices even more. So, there are people who could afford to pay their $10,000 a month mortgage, but choose not to, who are still living in those million dollar homes. Living in for free.

The phrase was in both very different movies.

The federal government under W Bush was pushing for home ownership... why not hold the feds responsible, since they were pimping the houses for the financial industry?

Lasissez faire capitalism is NOT what exists here. Welfare-for-corporations capitalism does.

Your sense of duty, or obligation, when signing a contract is, of course, admirable. And, if you were talking about making a deal with a family member, or a friend, or even an honest business person, I would agree. But, in case you haven't noticed, times have changed and the rules of the game have changed also.

In card playing, do you know what a "mechanic" is? In case you don't a "mechanic" is an expert in manipulating the cards so that when he deals he can give each player exactly the hand he wants them to have. I've known some of the best mechanics in the world, and believe me, it is impossible to "catch" them at their trade. Would you play cards with a group that had a "mechanic" as a player? Would you have the same sense of righteousness towards him as you seem to have with the banks?

Well, my analogy is exactly true; the bank on one side of the deal, and you on the other. What you don't seem to understand is that the bank does not enter into this arrangement with the same set of moral values as you do. They don't think of you as a customer, or a valued client. They think of you as a sucker to be fleeced, a victim, so stupid that just believing you're equals (in commitment) that you deserve to be cheated.

Did you know that the business of banks is not what you thought it was, and not what it traditionally was. Banks were supposed to borrow money cheaply from the FED, and co-mingle it with some customer's deposits, and then compete in the open market place for customers to loan the money to. They would charge an interest rate somewhat higher than the cost of their borrowing and the difference (minus normal expenses) was their profit.

But after 1980, when the people you have a sense of moral obligation to play fair with, the banks, completed the wholesale purchase of our Government, THEY got to write the rules. And, since they had that absolute power, and you didn't, do you think their sense of moral obligation to you was the same as yours seems to be towards them?

Suddenly loans became "old news" and since they wrote the rules, stodgy old loans, with their 5-10% interest was just too little. They figured out a way to increase their profit margins to 50-90%. How?.....FEES. They now make a majority of their profits screwing you in so many ways that the term, "unconscionable," is simply inadequate. You write a $10 check, having checked first to see that you had a $12 balance, and all was swell. But, wait, unbeknownst to you, just then the bank assessed a $4 monthly "maintenance fee" which put you "over limit." Bang! $40-$50 "penalty. Since they own the members of the banking committees in Congress, they usurped the right to behave as if they were the Judiciary and determined that you had to be punished, and thus an expense to the bank from your overdrawn check of a fraction of one cent morphed into a penalty charge to you of up to $50.

O.k, bad enough, but you were talking about homes, mortgages, and obligations to play fair. Did you ever ask yourself, how is it that when the financial crisis exploded and thousands of businesses and millions of people were being destroyed, Banks like Goldman Sachs made 20 billion dollar profits in as little as one month? (and that's not counting the billions of dollars that the former chairman of Goldman, our Secretary of the Treasury, Hank Paulsen blackmailed the taxpayers into forking over their money to the  billionaires running those institutions)

Here's how: They engineered the collapse. They manufactured derivative products, designed to fail, to sell to their unsuspecting customers. They found that if they could sell financial products that they knew were going to go bust, it would be like every gambler's dream come true, like having tomorrow's newspaper today. And so, they ordered their mortgage brokers to write mortgages to the absolutely worst credit risks they could find. "Liar's loans, no money down, 120% loan to value," and on and on. And then, guess what? They bought protection, insurance, against the collapse they knew was coming, that they had, in fact, designed and implemented. They "sold the market short" to the tune of hundreds of billions of dollars.
Millions lost their homes, millions more, their jobs, and millions more their health and dignity.

Goldman? They set aside a $20,000,000,000 reserve for bonuses to "reward" the geniuses that destroyed our country.

Yeah, you go and play fair with them; you have morals, you have ethics, and you have a sense of duty.

The banks made the loans with the house as collateral.  The contract you signed means that when you stop paying they get the house.  That's the contract.  Not that you will pay back the loan come hell or high water.  That's the deal you made, and that's the deal the bank made.

Your credit card analogy really doesn't work because as you said "you already have the stuff".  You don't already have the house.

But business is business.  And banks will do anything to stack the deck in their own favor.  You should feel no qualms about making the best business decision for yourself within the law.

But the part that gets me is this: people chose to buy overpriced homes, and chose to ignore this fact because they deluded themselves that they would either somehow get out or that this would never end. I remember looking at housing prices in 2003 and saying: there is something broken, these houses o not have an inherent value anywhere near what they are being sold. And I CHOSE not to buy these houses.