How to Stop the Drop in Home Values?

[tater]

Originally Posted by magicstix

You can't stop the drop in home values. They're dropping because they were overvalued in the first place...

This.


It's important to realize that the US housing market is very different than most of the world, too. It is my understanding that in Europe loans are "consequence" loans. Meaning that walking away is not an option—if you do, you'll be out a house, AND have garnished wages, etc. The US system allows people to brush themselves off and start over, but also encourages speculation (particularly combined with pressure to loan to deadbeats, etc).

Best solution is to stop underwriting loans (by the government), so that banks have real risk so housing prices can come into line with reality.