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I actually work in real estate and am in frequent contact with people whose homes are underwater. Many of them attempt short-sales. The thing is that you cannot paint them all with the same brush.
Many of the people doing short-sales and being foreclosed on were people with a conventional, reasonable mortgage who had never missed a payment, but suffered horrible luck...perhaps a loss of a job combined with a huge medical bill. I really feel for those.
On the other hand, there are many families who were, to put it bluntly, wildly irresponsible. They took a liar's loan or a loan with a balloon payments, bought a house they would NEVER be able to afford otherwise, and then on top of that decided to take out a home equity line of credit and use their already poor investment as an ATM for Mastro's and the Bahamas! Some fault lies with the banks for even offering such absurd loans, but a lot of fault has to lie with those homeowners. I'm sorry. They make a horrifically risky and greedy financial decision and now, of course, there are consequences.
So some are unfortunate victims of the economy, and some are wildly irresponsible...and neither side has an outright majority. There are plenty of both.
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