Underwater? The New York Federal Reserve thinks you'll be a renter soon

In a recent paper, the New York Fed studies the likelihood of a continuing drop in homeownership. To address the question the authors propose that anyone who is underwater in their home should be considered a future renter:"According to Haughwout, Peach and Tracy [the authors of the study], negative equity homeowners will face such daunting saving requirements to retain their home or purchase a new home that they will very likely convert to renters over time."See the study here: http://www.newyorkfed.org/newsevents/news/research/2010/rp100604.htmlBottom line: While the official government message is that underwater homeowners should do everything they can to hang in there, one could argue the New York Fed is already writing them off.