I was hearing a lot of that sort of talk last year when we were looking for a house, too. I was reading books on buying real estate that encouraged being willing to spend more money to get more house, and that discouraged buying a house solely as a place to live in and not as an investment. One of those books also discouraged new homebuyers from getting a fixed-rate mortgage to avoid the risk of an adjustable-rate mortgage. I’m glad I didn’t listen to that advice.
My sister told me that her co-worker had met with an attorney to file for bankruptcy after finding that they couldn’t really afford their $350k house, which is way above the average house price in our area and more expensive than either of our homes. (We live in a hell hole, weather speaking, but our houses are cheap.)
Anywho, a few weeks later, she got a call from her attorney. Her bank had written the lawyer and said that if they forewent filing for protection, the bank would forgive $100,000 off their loan.
$100,000.
The attorney said that in 25 years doing bankruptcy, he’d never seen that before.
I feel the same anger the OP does. Like the proverbial ant, we’ve done everything right. We went to college to get degrees so that we could make a decent living. We have a 401k, two 529 accounts for our kids’ college funds, we live in a house that is far less than we were approved for, we buy used cars, and we pay our taxes on time. In short, we’ve lived within our means.
I want my bank to forgive $100,000 off OUR loan. And Congress had damn well better offer blanket relief to ALL homeowners instead of just those people who fucked up and couldn’t use a calculator or read a loan document and figure out that when their ARM re-set in 3 years, they’d be up a creek without a paddle.
My only consolation is that with the fire sale that’s been going on lately, my husband the stock broker is snatching up what I hope will prove to be bargains.