The home ATM caused many homeowners to be underwater
The WSJ has an interesting article that should open up some eyes on why homeowners are underwater on their homes.
The conventional wisdom has been that anyone who bought at the top of the market and has now seen price declines is underwater and lost equity through forces that were beyond their control.
Policymakers in the Obama administration are frustrated that banks won't modify more loans and prevent more foreclosures and are threatening to get tough on lenders who won't cooperate.
A new study reported in the WSJ challenges that premise.
And I can testify that a number of foreclosures and short sales that I have looked at in the Charleston real estate market were due to refinancing and the use of homes as an ATM machine to take out equity. The info is in the tax records.