[Kozak]

By the time the bank repossessed it, the neighbors owed more than twice that amount: They had borrowed repeatedly against its inflated value, and when values slumped, they were "upside down" on their mortgage — with negative equity. Stories similar to this — of people using their property like ATM machines — are plentiful in this region of Southern California, known as the Inland Empire. "I feel bad that people got themselves in over their heads. People in these houses borrowed against the future, spent money they didn't have.

And I DON'T have any sympathy at all. Nor do I feel any obligation to bail them or the banks out of this mess. Not like anyone will ask me of course.

[melissa_in_ga]

I’ve mentioned this on other threads before:

My brother-in-law bought a house in Northern California for $600,000 in 2000. He now owes 1.2 million. He makes slightly over six figures. He can’t sell the house for what he owes and is robbing Peter to pay Paul. I expect that he, his wife and his 4 children will show up on my doorstep one day because the bank(s) will foreclose. It’s only a matter of time.

He’s a genius, but no common sense. Meanwhile, we’re in an 11 year old house with a low fixed rate and a mortgage we can afford. When my kids ask how some of their friend’s parents can make so much money that they’re in McMansions I tell them that the more likely scenario is they’re “highly leveraged.”