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CC:"They're high because the owners are walking away from their worthless underwater properties, not because of the underwriting guidelines that granted the owners loans to begin with. "

Same thing.

The bank loses its shirt.

The bank didn't make the loans go down in value. That was probably obvious from day one that if you invest in over priced property, the bubble will bursts and you'll get left holding what's left.....

No sane bank would be loaning money in these areas.

And few properties are 'worthless'. they are simply 'worth less'.

Obviously, the underwriting guidelines failed too, since many people who are underwater didn't walk away. They toughed it out.

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