"If you get to live in a nice home for a few years and then lose it to foreclosure, you are not worse off than someone who never got to live in a nice home in the first place."

So, let's say you put down 20% of the purchase price on a home, and get an adjustable rate mortgage so you can finance the rest of it. You figure that, even though the rate will reset in three years, you'll be able to refi, and get a better rate. However, housing prices have slumped, and now your home is worth only a little more than your mortgage. You can't refi, since you don't meet the LTV requirements that newly conservative lenders are enforcing. You can't afford the new payments, and your home is likely to sit on the market for many months, since there are so many other homes for sale out there.

How is that "not worse off" than someone who rented a place while housing values went in the toilet? The renter has his credit record intact, as well as his equity, which sounds like he's a lot better off than someone who wanted to own his own piece of the American dream.

People who put down 20% are not the source of the widespread foreclosure problems. It's people who put 0% down and signed a contract they could not honor.

OK, forget the 20% bit. If you lose your home to foreclosure, you still take a hit on your credit rating. You are still worse off than someone who just rented the entire time.

While I agree that some people can benefit from the foreclosure mess, and that it is important to go beyond the simplistic "look at those poor, innocent people losing their home" spin the media and politicians put on the current rash of foreclosures, this article doesn't really do a great job of fleshing out all the ramifications of the current situation.

Ummmm ... if you can't handle your own finances well enough to understand which homes you can and cannot afford, then you should take a hit on your credit rating. Look -- the kid who asked for a higher grade in English class so he could get into a school he wasn't qualified for is now buying homes!