OK, so if all house values have crashed at the same rate (generally what happens in cases like this), the equity that they lost doesn’t make much of a difference because they can buy a new, larger home with the difference still based on your new sell value.
Of course, this can mean being “underwater” but that literally does not matter in the big picture (besides of course the mental burden of having to give more than needed to corrupt banks), provided that you are still able to afford the mortgage. 2008 included massive job loss which means people would have had to walk away from their mortgages even if their houses appreciated as people without jobs could not buy the houses.
If you bought a mortgage you can’t afford because you wanted a house during a huge bubble, then you already fucked yourself regardless of the market. Or if you lost you job in a bad market (like now), then it is really unfortunate and the billionaires and companies need to be compelled to actually pay their taxes to keep the unemployment payments running.
One thing to note on your first point: Generally speaking, the only time that equity loss doesn’t make a difference is if there is no mortgage. If you do have a mortgage; When housing prices are stagnate or increase, you can sell your home for a similar one with little to no loss (the buyer of your house effectively pays off your old mortgage and you roll your equity into your new mortgage).
BUT, if prices tank while you still have a significant portion of your mortgage owed: you’re screwed when you need to relocate. The sell price of your house won’t cover the reminder of the mortgage. If you need to move, you either pay it off (hope you don’t need to move for work) or foreclose. The bank is cool with either - they couldn’t care less about you.
In the 2008 crash, a friend’s house was stolen by a bank. He was upside-down but making his payments, and the bank forced foreclosure anyway, sold the house to a subsidiary for an absurdly low price, and sold it two years later at a massive profit. My friend, his wife and son moved in with me. I’m hoping the CEO of that bank gets his own personal Luigi, and the first shot is in the guts.
OK, so if all house values have crashed at the same rate (generally what happens in cases like this), the equity that they lost doesn’t make much of a difference because they can buy a new, larger home with the difference still based on your new sell value.
Of course, this can mean being “underwater” but that literally does not matter in the big picture (besides of course the mental burden of having to give more than needed to corrupt banks), provided that you are still able to afford the mortgage. 2008 included massive job loss which means people would have had to walk away from their mortgages even if their houses appreciated as people without jobs could not buy the houses.
If you bought a mortgage you can’t afford because you wanted a house during a huge bubble, then you already fucked yourself regardless of the market. Or if you lost you job in a bad market (like now), then it is really unfortunate and the billionaires and companies need to be compelled to actually pay their taxes to keep the unemployment payments running.
One thing to note on your first point: Generally speaking, the only time that equity loss doesn’t make a difference is if there is no mortgage. If you do have a mortgage; When housing prices are stagnate or increase, you can sell your home for a similar one with little to no loss (the buyer of your house effectively pays off your old mortgage and you roll your equity into your new mortgage).
BUT, if prices tank while you still have a significant portion of your mortgage owed: you’re screwed when you need to relocate. The sell price of your house won’t cover the reminder of the mortgage. If you need to move, you either pay it off (hope you don’t need to move for work) or foreclose. The bank is cool with either - they couldn’t care less about you.
Edit: Clarity and typos.
In the 2008 crash, a friend’s house was stolen by a bank. He was upside-down but making his payments, and the bank forced foreclosure anyway, sold the house to a subsidiary for an absurdly low price, and sold it two years later at a massive profit. My friend, his wife and son moved in with me. I’m hoping the CEO of that bank gets his own personal Luigi, and the first shot is in the guts.
That should definitely be illegal… Absolutely zero logic, just corruption.
Also hoping for the worst for that CEO, the board, and the entire management suite.