Is "walking away" from a mortgage wrong?

Yep, its wrong.

Get back to your sex thread wiki

As I said in the other thread I understand the reasons people walk away and would be tempted myself were I in that situation. I would also have a very hard time living with myself and sleeping at night knowing I walked away from an obligation. The only way I would walk away was if I could not afford the note I signed anymore.

I can see both sides to this but in certain situations (like that other thread) I think the blame would mostly fall on the contractor. If you're walking away simply because you're upside down then that's a problem.

morally? no

it's a contract. there are mechanisms in place in the result of a breach. morality plays no part in that mutually-bargained exchang

It is absolutely not wrong to default, in my opinion.

Businesses break contracts and leases frequently. To avoid anarchy, there are penalties that result from breaking contract which are usually spelled out in the contracts. The penalties are one of the many negotiating points in a contract and balanced by costs elsewhere if they are not strict.

There was even a mortgage company or large bank recently that broke a lease contract on one of their large office buildings. It's just not a big deal. Parties that enter into contracts understand they can come to end in a variety of ways and make sure they are okay with associated penalties before signing.

Are we supposed to feel sorry for a bank when somebody hands an underwater property back to them? The bank needs to ensure a reasonable valuation, enough money down, and a high enough interest rate to compensate them for these risks.

Now, when the government bears the risk of default, things get out of control. But to me that should not weigh on the mind of the homeowner considering default. The homeowner must weigh the downside but has a greater responsibility to provide for their family than they do to the bank.

Only as wrong as theft.

Yes, it's wrong. It's no different than when interest rates go up to 7 or 8% the bank says well, this 3.5% loan doesn't make economic sense for us anymore, so we're calling it, please pay in full within 30 days or get out. A deal is a deal and when you're on the wrong side of one, clean it up as quickly as you can without breaking your word and try to learn from it. But if you walk away from a deal you made just because it doesn't benefit you any more, you show yourself to be someone who can't, and shouldn't, be trusted again going forward.

That said, if major variables change, such as job loss, illness or some other catastrophic situation, there are legal routes such as bankruptcy, short sales agreed to by both sides, etc. that both sides understand exist and accept from the beginning.