[allmost]

Some recent valuations are nearly halved. In general it's not a good thing to default for obvious reasons, but paying twice what your house is worth is not a good thing either. These are market fluctuations. Not “stupid people” in many cases.

[oh8eleven]

paying twice what your house is worth is not a good thing either.
No one paid twice what the house was worth. They paid exactly what the house was worth at the time they bought it.
In fact, they thought the house would be worth a lot more in a very short time and they were wrong.
If you bought your house planning on living there for 15-30 years, you can live with the market fluctuation.

[GOPJ]

If your home doubled in value over a five year period, would you feel the profit was yours? Of course. But you decide if it declines in value you should be able to walk away?

[sportutegrl]

It is a myth that the vast majority of 'underwater' homeowners bought at the peak and their home value crumbled. Most underwater people actually got cash out refinances, using the cash to pay off credit cards, which they promptly ran up again. (Rinse and repeat.)

Others got exotic loans with little to no money down, and/or interest only so that they could buy more home than they could afford.

Even if they bought at the 'peak', responsible homebuyers who got fixed rate mortgages with a fair down payment would usually be able to keep their balance below the depressed value.

Besides, why does it matter if you are underwater, anyway? I am underwater on my car right now. So what, should I mail the keys to the bank? Buy a home you like at a loan you can afford, these things won't change if you go underwater, but your property taxes might go down. It's still cheaper than renting.

[hinckley buzzard]

Not “stupid people” in many cases

Nope, not "stupid," just morally diseased filth.