http://money.cnn.com/2008/02/06/real...ex.htm?cnn=yes

So people with high rate mortgages are simply walking away, taking the credit hit on foreclosure, and buying cheaper...

Here is my thing (now I'm not a mortgage bank, but I do run a business and understand profit vs loss) why would the bank not adjust the rate? Is it greed, or policy? Figure this, if the market is this bad and recession is in effect, why not lower the interest rate for these people? Instead of 8.9%, lower it to something they can pay, like 3%. They are still making a 3% profit and get to keep funds coming in, where as in a foreclosure they inevitably lose.

I don't understand that practice.

__________________

An unwavering defender of those I see worth protecting.

"promote the general welfare, not provide the general welfare"

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.