As many of you know, "I Buy Houses".  I market this and by doing so I deal with a lot of sellers.  Lately, I am finding one common characteristic that, in my opinion, is quite disturbing.

 A typical scenario I find in this market is as follows:  Owner purchased his home a few years ago for $350K.  The market exploded, Owner reappraised his home and found out it had escalated in price to $600K.  Owner went out and took out an easy money 2nd mortgage for $200K, therefore total debt = $550K.

Everything was fine....until Owner finds out that now his home is not worth $600K, but worth more like $450K - $500K.  

The troubling characteristic that I am seeing is that many Owners are making the decision to NOT PAY BACK THE BANK!  They seem to have this lackadaisical attitude toward their problem and I just don't quite get it...

It's not like they needed or used the additional $200K cash to buy the house - that money went right into their pockets...they were simply borrowing their "profit" (at the time).  It is going to be an interesting correction...will keep you posted!

Hugh