Underwater home values

The time to handle underwater home values is when the loan is made, not later.  For example, in Italy you can not get a mortgage for more than 60% of the value of a house unless you are a bank employee in which case it goes up to 70%.  Having put 30 to 40% of the price of a house as a down payment means people are more likely to take an interest in maintaining the value of a house.  Of course this requires the patience to accumulate a down payment.  While Italians are typically very impatient in traffic, they are more patient than Americans financially.  Most Europeans are raised to avoid excessive debt.  Americans are constantly encouraged to build more debt.  A very bad approach that is now bearing fruit: poisonous fruit.