Great news; I believe the number of mortgage "walk aways" is "better than expected" - now how do I buy stock on deadbeats? (DBDT?)  Look there was no problem buying these assets when all they did was go up; even better when one could serial refinance to live the "life we deserve", but nowhere in the contract did it say the house could go down in price.  Therefore, it's time (and our right) to walk away.  In 2007 and early 2008 we said this would be a big issue as masses of home owners became upside down.  In fact our prediction was eventually 1 in 4 homes would be underwater - we should be very close.  (Oct 9, 2008: WSJ - Nearly 1 in 6 Homes Underwater) (Mar 9, 2009: One in Five Houses Underwater)   Frankly I have not checked lately because what's the problem?  Let the taxpayer take care of it - if not through direct bailout of the banks (May 29, 2009: In 1 Year US Taxpayers on Hook for More than $55,000 per Household), then certainly through much higher fees.  (May 29, 2009: USA Today - Banks Find Ways to Boost Fees)

Anything that it takes to get this conspicuous consumption economy going again is fine by me - even people who live "rent free" for a year in excellent housing accomodations that they put nothing down in the first place to "own" before slipping away into the night - I'm all for it.  All that money not paid for mortgages simply means more moolah to spend on other items which will help us drive the market up on "green shoot" retail spending reports. Just consider it another form of stimulus - the Homeowner Self Stimulus Act.

Via USA Today:

• The home had been appraised at $390,000 when she refinanced in 2006, but she estimates it's not worth the $320,000 it initially cost in 2004. So Sakson did what a growing number of homeowners are doing today: She stopped paying and decided to let the bank take her home.
• "I'm walking away from my house," says Sakson, 57, who stopped making payments about six months ago on her home in Pennington, N.J. "The bank can have it."  (that's six months of income to spend on shoes, jewelry, eating out, whatever is needed... multiply by a few million each year in some form of default... it soon adds up)
• What Sakson did is called a strategic default, or a voluntary foreclosure, and it's fast becoming a major challenge to the government's $75 billion effort to keep distressed borrowers in their homes.