Reply #4: It's important to know how many of the upside downers are investors [View All]

[Gormy Cuss]

as opposed to poor schlubs who are in this situation with their primary home. Investors may react quickly and take a loss, where others will want to wait out the situation and stay in place.

If investors back out of a large number of units in a local area the prices will continue to decline and that could exarcerbate the level of homeowners who owe more than the value.

It's not a pretty situation.

quote:
"The numbers are clearly worse," says Gyan Sinha, a senior managing director at Bear Stearns.
The reason: Lenders were "able to generate a lot more volume in the face of rising rates" by loosening lending standards, Mr. Sinha says. "More aggressive lending was clearly taking place," he says.

The mortgage industry has been building this house of cards for several years.