Unfortunately that is what manny borrowers are now doing even though they are not in financial trouble. Lets put ourselves in the borrowers frame of mind.
Mr. Borrower has a Mortgage balance of $650,000. He can still make his payments because his job is ok and he is still making good money. He knows for a fact that the same houses are now going for $400,000 in his own neighborhood. So he thinks...."hmmmm....if I buy this other house for $400,000, I can save $200,000.....yes my credit might get ruined but is the price worth it?"
How do you talk someon out of this thinking? I will be hones, it is tempting to me if I could pull off buying another home the same as mine and save $200,000....who would not be tempted. It is in my opinion that this though passes by every current homeowner and manny are simply acting on it.
Cheers.
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