These people beat out other would-be homebuyers, in large part because they threw caution to the wind and ignored the risks of resetting adjustable rate mortgages. As home prices continued to rise, these people at some point had enjoyed home price appreciation of 20-25 percent annually, coming out to a real increase in some cases of 500-600 percent on their equity (minimal as it was).
If these people cashed out at the right time they benefitted greatly from their luck, buying essentially on margin.
Now that the tide has turned, how does the evaporation of nothing but good fortune turn these people into objects deserving of sympathy and loan forbearance and principal forgiveness (all paid, indirectly, by the rest of us)?
Beware of people who claim too loudly to be victims. These are bogus victims and frauds. The real victims were the people priced out of their desired locales in years past.
Eric Dixon is an attorney who provides strategic analysis on a variety of legal, economic and public policy issues for clients.