> My impression about the housing problem is that
> people won't be on the street -- they'll be renting
> garden apartments and the like. If the mortgage
> goes belly up they still have the income they
> were using to service it available to pay rent.
Bearing in mind that there are very few non-recourse mortgages these days, perhaps especially not the so-called "sub prime" ones, presumably the borrower's available income after a default would be reduced by the amount in whatever is the applicable jurisdiction that would have to be paid (probably as the result of an income execution s/k/a "garnishment") to satisfy a deficiency judgment in a mortgage foreclosure proceeding.
Further, although (in theory though with state-to-state variations in the law and procedures involved) the borrower would have a right to a hearing to contest what amount the deficiency judgment shall be, almost all residential mortgages contain attorneys fees make whole provisions mostly for the benefit of the mortgagee in case of an uncured mortgagor default so that it is unlikely that middle- and lower-income debtors would have the wherewithal cost meaningfully/effectively to contest what these amounts shall be.
Nor in light of the recent amendments to the Bankruptcy Act -- in substantial part, insofar as individual debtors are concerned, a repeal of past law that was comparatively "liberal" for an individual Ch. 7 debtor's benefit -- is a just generalized/glib reference to seeking relief in bankruptcy likely to be availing.
How many and what percentagesd of mortgage borrowers in default, then, will be able to afford the "garden apartments" posited above?