I lot of people are having the following inner dialogue.
My house is underwater! Whose fault is that? I’m not one of “those” people, am I? And I don’t mean I live in Pakistan (donate here). I mean one of those irresponsible overspenders and speculators? How did this happen to me? All I did was live in my suburban home, go to work, raise my kids, take out a HELOC (home equity line of credit form of 2nd mortgage) and redo my bathroom. Meanwhile, the world went to hell – with the real estate market leading the way. And now I owe more than I could sell my house for. So, I can’t even refinance to take advantage of all time low interest rates and lower my monthly nut. I have to pay. Thank God, I can pay. But then why am I ashamed? And what can I do about it? Why shouldn’t I walk away, like housing investors do? Where would we live? I’m stuck. That’s what has me angry – and a whole lot of other people too.
And for a much fuller discussion of how this happened, see The Slump Goes On: Why?, by Paul Krugman & Robin Wells, NY Review of Books, Sept. 30, 2010.