[quote author="tmare" date=1253396630]This estimate sounds accurate to me, in fact, my own sense was that it would be more like 30 years from now for some of the hardest hit areas. This is why it makes absolutely no sense for some people to continue to try to pay their mortgage. I think I struggled with the moral issue for about two minutes. Indentured servitude to a bank for a home that should never have been valued at the price you paid just isn't a moral issue to me. The concept of being underwater for decades isn't an idea that Americans are familiar with, so trying to convince them that this is reality is another story. I've tried to tell a friend that her house will never be worth what she paid in her lifetime (she's 50 years old, paid 545K for a dump that is maybe worth 200K, if she could sell it).</blockquote>
Giant stacks of 100s of 1000s of dollar bills will generally make people shrug the moral issue quite easily. Most of them will even convince themselves in some weird system of ethics that this is right ethically.
I for one, if I buy some commodity for a million dollars, then I fully expect to pay that amount, and if I don't have the money and borrow, I expect to pay it, one hour of my salary at a time. People buy a loan from the bank, and the buy a house from the seller. But in a great magical trick, everybody now bundles them together.
If I buy something and I overpay, that's between me and the seller, NOT between me and my older brother I borrowed money from. Pretty simple concept really. Blaming the banks here is like the fat guy who blames McDonald's for his fat appearance. Sorry, it was still a personal choice to borrow the money.
Morality doesn't exist for the benefit of individuals, but for the benefit of the collectivity. It's quite obvious walking away from debt benefits the individual to the detriment of the the collectivity. The very reason for morality to exist is to prevent that kind of behavior.