The value is dropping, so I'm not paying!

I am watching a segment on 60 Minutes on the mortgage meltdown. Interviewed was this couple that said that is doesn't make any sense to pay $3200 per month for a 1200 square foot home, so they're just not going to make the payment to the lender.

They feel that if the property value keeps going down, and that payment keeps going up, why should they keep paying?

Hows about because they signed their name, giving their word that they would pay the loan back. So much for integrity! The lender is holding up their end of the deal, helped them finance what they wanted, and now their going to walk away? Tell me, how did this become the lenders fault? What could the lender possibley do to increase the market value of their home so that they feel better about repaying their loan?

I wonder if they would just stop paying if the property value went up? It seems to me that it shouldn't matter what the property value is. Sure, it wouldn't be fair, but a deal is a deal. Afterall, they admitted that they could afford the payment, but it didn't make any sense for them to repay, so they weren't going to.

Sure, they felt trapped. They couldn't refinance because they owed more than what the house was worth. I wonder why they bought this house? Was it to be their home, or was it an investment?

If it was to be their home, then what difference would the value make? It is their home, no other place like it!

If it wasn't their home, then was it an investment? Were they speculating on the value of the home, planning to sell it as soon as they could get a tidy profit? Were they gambling on the future value of this property?

Many people gamble and speculate every day. Some people win big, some people lose big.

Maybe these people in the interview never made an 'investment' in a car. Let's say that they paid cash for a new car, drove it for a couple of months and then found that it no longer was worth what they paid for it. What would they do? Bring it back to the dealer and demand their money back? What if they had financed it? Would they just stop paying for it? Probably, and probably.

I know a car is much different than real estate, but the principle is the same. In my opinion, it's people with attitudes like these that give those with real problems a bad name.

Do you think that this mortgage crisis is made up primarily of people that were speculating on future real estate values, or do you think that it is from people who just didn't have a clue about what they were doing?