“
One of the many (dubious) assumptions that Wall Street rocket scientists made before the housing and credit bubbles burst centered on what mortgagors would do if the economy hit a “speed bump” (back then, of course, the conventional wisdom was that severe downturns had been eliminated by expert policymaking, reams of academic research, and the wisdom of the ages).
Generally speaking, they believed that homeowners who ran into financial difficulties would behave in the same way that others had before them — that is, they would make sure the monthly mortgage bill was among the first to be paid.
Well, as with the notion that house prices never go down, this theory turned out to be wide of the mark
— Panzner
