OK, yes, we agree that there are stupid people out there who do stupid things. I don’t mean to come off as a knee-jerk contrarian, but with regard to the willful-foreclosure phenomenon you’ve shown me evidence of… one person who was considering going that way.

Never under estimate the capacity for stupid behavior. People all over the country are voluntarily allowing their properties to be foreclosed simply because the loan balance exceeds the value of the home. Many of these people had crappy credit ratings to begin with, and they bought their homes with little or no downpayment. At this point they believe they have to lose by walking away?

Take A Look At This for an example of the kind of thinking that has gotten us to this point.

There is nothing magical about home ownership that turns people into responsible citizens, and the current economic downturn has provided us with plenty of evidence to demonstrate this fact.

Agreed. I’m right with ya so far. But then…

A significant number of homeowners facing foreclosure today are not in trouble because they have lost jobs or had adjustable rate mortgages. Many have simply stopped making payments because the value of their homes has declined.

Hurhwhaaa?… Am I misunderstanding something here? Because it looks like you’re saying that people who can afford to make their house payments are just choosing not to out of spite because their homes have lost value? They’re in such a hissy fit over short-term losses in their home’s value that they purposefully allow themselves to be foreclosed upon – so that they can lose every single penny they’ve ever put into the house?

I’m as jaded as anybody about the general public’s capacity for stupid behavior, but I just can’t buy this. Does that evidence you were mentioning in the first sentence point to this going on? If so, I’d be very interested to see it.

On the (slightly) lighter side…

While no place has been entirely immune to the downturn, some areas have been much harder hit than others. In December, the unemployment rate in Detroit was 21%.

Yeah, but the good news is that the average home price in Detroit is all the way down to $18,500! With bargains like that, who needs a tax break? Come on down, folks – we’re practically GIVING them away! …Kidding, of course.