It’s important to pay attention to the sociological dimensions of the financial crisis (aka Great Recession) as it continues to evolve.
I think this article on SocketSite touches on a very interesting point. Social dynamics are at play as well as financial ones on the path to a mortgage loan default and foreclosure. But as the ‘bug’ spreads, and more and more of us know people who have faced foreclosure, it becomes less of a Scarlet Letter. And that implies that the social reasons to avoid foreclosure get weaker as it becomes more prevalent around us. It’s a snowballing effect.
So before we are able to truly bottom, we need to combat this force as well as the purely economic ones.
Note – the study referenced here suggests that 1 in 3 California mortgage defaults in 2008 were strategic, which represents a 16x increase from the rate only 4 years earlier.