"If the intent is to help homeowners, then foreclosure is undoubtedly the best solution. Household balance sheets have been destroyed by taking on too much debt via the purchase of inflated assets. With so little savings, a household with negative equity almost implies negative net worth. Walking away from the mortgage immediately repairs the balance sheet. Credit may be damaged, but homeowners can rebuild it. And by renting something they can afford, instead of the McMansion they cannot, homeowners are most likely to have some money left over each month that they can save toward a down payment on a house they can eventually afford."
I invest in seed and pre-seed NYC startups at Brooklyn Bridge Ventures. Native Brooklynite, 11x triathlete, 2x 70.3, 4x marathoner, softball player, hockey goalie. Check out my This Week in Startups interview or check out my bio here. Also, this is me SEOing myself by linking to Charlie O'Donnell, and Charlie O'Donnell and more Charlie O'Donnell. PR people, do not pitch me to cover your story, as this is my personal blog. I'm not a journalist.