They need to account for walk-aways in these stats. I knew a flipper who had 11 houses when the bottom fell out. There was no way.
Another guy bought a $500,000 house that fell to half that a year later.
There are circumstances where the right thing to do is to walk away. The poor little innocent mortgage companies knew what they were doing when they gave the loan. It is a deal you give me money to buy the house. If I don’t pay, you get the house. Walking away is a legitimate and legal business transaction based on changing circumstances.
Neither of these guys is going to be homeless. They didn’t get fired or go through a layoff. They simply exercise an option of their loan agreement.
In the old days, when property value only went up, most banks wouldn't bother to chase down the borrower because the residual debt wasn't large enough to warrant the additional cost.
These days, however, more banks are making continued additional payments a condition of short-sale agreements, and are hunting down deadbeat borrowers who leave the keys in the mailbox.