I am so glad to see this article. So many people here were too young to realize what was happening, and now don't believe the cautions of those of us who did. I think most people here understand the perils of buying too much house, but there are more risks too many seem blithely unaware of.
No EF? There's springy debt - no problem! Who needs an EF? "I'll just use my HELOC."
Um, nope, the banks shut them down, even for people with perfect payment histories who still had steady employment. Ditto for credit limits on CC's - yup, when I started shopping at cheaper places, B of A cut my limit in half, those bastards. Happily, I had no debt and just switched to another bank. Not so easy if you have a balance and/or no job.
Finally, this was what firmly convinced me to become a die-hard, card-carrying member of the "Don't Pay Off Your Mortgage" Club. I'd much rather have 3, 6, 9, 12 or more months' mortgage payments in my control than give money to the banks one second before it's required. As I was working my way to FIRE, I always calculated how long I could make payments without an income. It was pretty gratifying to watch the numbers rise as I saved steadily. I knew I would never lose my house, no matter what happened.
Thanks for posting this link. I'm going to have to read it a little at a time, because it makes me see the faces of real people I know. Most have recovered somewhat, but many have been left far behind on life's road, especially on the road to FIRE.