If these lenders overreached by raising interest rates in their ARMs, I hope they enjoy caretaking all these vacant properties.
Meantime, the borrowers who are gainfully employed will all get a second chance to buy a the right sized home in the right location at the right price and on the right terms next time.
Actually, I had one Chapter 7 client (was temporarily out of work due to illness) let her overleveraged house go during her case. The day before the redemption period was up, a relative bought her house back for her for half of what she owed, and they worked out a lease with option to buy between themselves. The Chapter 7 left her owing nothing to the mortgage company.
No.
NO!
There is no economic equilibrium, only gloom. We are poised on the precipice of the abyss, a yawning chasm of apocalyptic chaos, real wrath of God stuff: bleeding walls, fire, brimstone, dogs and cats living together . . . mass hysteria!