On 4/27/2012 7:35 PM, Bob F wrote:
Pete C. wrote:
Home Guy wrote:

"Pete C." wrote:

"And if they stay put, they will eventually get equity."

Being "underwater" is purely a theoretical thing if you have no
intention of selling any time soon.

Is that the new paradigm in the US?

That you can't count on the value of your home to at least not dip
below what you paid for it?

You never could really, but since it was unusual people just came to
expect that. Probably "home value coverage" needs to be a new category
in homeowner's insurance. Just as you have insurance to cover
potential destruction of the home, you should have coverage to cover
the potential gap between mortgage balance and sales expenses vs.
current market value in the event you have to sell. Similar to other
gap insurance products currently available.

Interesting idea, but that could sure take down some insurance companies on a
real estate market swing.



It wouldn't be a problem in our "free market" . If the insurance
companies made lots of bad bets we would bail them out instead of
letting them fail....