Mortgage bankers should be worried. One of the reasons that the credit crunch happened was that banks had tons of loans on the books where the property securing it was not worth the amount loaned on it. When it came time to revalue those loans or "mark to market" they found themselves without enough other assets to be solvent.
The continuing drop in housing prices keeps this pressure on them. And now public opinion is changing as to what is acceptable in terms of personal conduct.
Having lost a house to foreclosure I can tell you personally that there is a lot of unreasonable guilt. We did everything we could (including dumb things like emptying our 401K) to keep up with our bills when both of us became unemployed in 2009.
In the end there was no alternative and the bank came and took our house of 15 years. Even though they refused a short sale and slow walked us through mortgage modification the old ethic of honoring debts you agreed to pay really gave me a few sleepless nights (I've since gotten over it).
Now that the numbers of strategic defaults is growing, the social pressure to honor your debts is changing. People have seen that businesses don't push a bad situation; they go bankrupt even when they have capital to pay some of their debts and start over. After five years of housing crisis, the American people are starting to ask why they should not do that same?
"Most people who own a home know of someone -- a friend, a colleague a family member -- who has defaulted, especially in housing markets that have taken a big hit," said Chad Ruyle, co-founder of youwalkaway.com, a service that advises homeowners on walking away from their mortgage. "They realize these are not bad people. They're not deadbeats. They're just like them."
The Overton window on how we think about mortgages has begun to move and it has to scare the crap out of the bankers. But you know, I have exactly zero sympathy for them. There has been opportunity after opportunity for them to do the right thing by the communities that they have made so much money off of and at every turn they have either declined to act or dragged their feet when they were forced to by the Federal Government.
It is one thing to have some loyalty to a company that acts as though it is trying to help you, to make things work. It is quite another to expect anyone to have loyalty to a company that treats you like dirt and says no at every opportunity.
This is another example of the 99% waking up and realizing they have more power than they thought. As long as the banks seemed like they were acting in responsible ways and there were so few people who defaulted on their mortgages, people would hang in there, even if the terms were highly unfavorable to them.