This is why I don’t support any effort to “bail out” homeowners who overpaid for their homes or borrowed more money than they could afford to pay back. Government bailouts as are being thrown around this election year only serve to ratify the excesses of a bubble market.
In markets hit hardest by falling home prices and rising foreclosures, lenders and brokers are discovering a new phenomenon: the “buy and bail,” in which borrowers with good credit buy a new home — often at a much lower price — then bail out of the “upside down” mortgage on their first home.
More on this topic
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Case-Shiller Home Price Index and Home Sales: What the Latest U.S. Housing Market Data Show
(Money Morning, 4/24/12)
In Today’s Market, Can You Afford to Be Misled By Fantasy Financial Reporting?
(the Underground Investor, 3/12/12)
Aftermath of a Crisis
(Finance Documentaries, 5/18/12)
Greece Secures Bailout, Gold Prices Respond
(Learn Mining News, 2/23/12)