He writes,

This couple bought their Reno home in June 1988 for $127,000. Their home is currently valued at $100,000. They currently have a mortgage worth $168,000. At first blush, this seems strange. Assuming a normal down payment and paying off the mortgage for 14 years, shouldn’t the current mortgage be much lower? Indeed, should it not be lower than $100,000 (in which case, they would not be underwater)?

Are the Kellers “responsible” homeowners? I am not sure that anyone is in a position to pass judgement on how they chose to manage their wealth. I am happy to label them “responsible” homeowners. I’m just not sure why society should necessarily be obligated, in this case, to enact a wealth transfer in their direction (away, for example, from yours truly, who foolishly chose to rent a small town home 2000-2009, instead of living the American dream).

Pointer from Mark Thoma. David does not seem to have gotten the memo that says that mortgage borrowers are always victims.