alt Hacker NewsBut that option is obviously worse than declaring bankruptcy, which you can do. You can't be forced into remaining with your underwater house.
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snovv_crash • last Thursday at 6:46 PM
The bank isn't going to give you a loan for the next 300k house though, if you declared bankruptcy.
It does raise the point though that anyone who borrowed against his house to obtain other assets could be negatively affected by this turn of events.
Also in the case of mass bankruptcy and mortgage failure of the lower middle class I guess there would be risk of bank failure as in 08? That said, I still think the hypothetical illustrates the overall situation quite well.