Originally Posted by JohnnyJ
With the exception of our housing values going down, I don't understand how other people will be hurt in this scenario. If you kept clean and had a mortgage you can afford and pay on it, no bad things will happen. I am one of those folks that may be upside down right now (bought in 04), but since I can afford my house payment, the only thing I am screwed by is the fact that I can't move without taking a loss. I shouldn't get govt money for that.
Along with lowered property values, the people who remain in the neighborhoods are going to be faced with dealing with other factors that are associated with lower property values such as increases in crime, higher resident turn-over, lower percentage of owner-occupied homes, increase in abstee landlords, etc...
Also, the cities and school districts that these foreclosed homes are in will experience decreases in tax revenues which will force them to cut back on city services and school spending.