The LA Times has an interesting piece on what is frequently called jingle mail:
Bankers and housing market analysts are warning of a chilling new trend in the mortgage world: Homeowners voluntarily defaulting on their loans even though they can actually afford to make the payments.
It’s known colloquially as “walking away,” or more jocularly as “jingle mail,” from the sound your house keys supposedly make when you mail them back to your bank.
It’s a way of saying that Americans are beginning to apply a cold financial calculation to home ownership: When a home’s value has fallen below what is owed on its mortgage, they feel it makes no sense to keep up the payments.
“That is going on, clearly, and there’s lots of evidence of that in the market,” Don Truslow, senior executive vice president of Wachovia Bank, said in a conference call with investors last month. A few weeks earlier, Treasury Secretary Henry M. Paulson had waggled a stern finger at homeowners contemplating walking away from affordable mortgages: Do that, and you’re no better than a “speculator,” he said.
Elsewhere, media reports and Internet postings are rife with stories about the trend and a supposed sea change in American attitudes toward debt. But there’s a major problem with all this talk about the phenomenon of solvent homeowners “walking away”: There doesn’t appear to be any hard evidence that it’s actually happening.
Is the rhetoric about the crash of the housing market as overblown and overheated as the housing market itself once was?