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re: Is "walking away" from a mortgage wrong?
Posted on 10/11/12 at 8:44 am to WikiTiger
Posted on 10/11/12 at 8:44 am to WikiTiger
Nicely done spinoff 
I will say this until the day I die. There is nothing "wrong" with walking away from a mortgage. There is no moral component here at all.
A mortgage doesn't say, "pay or you're a bad person". It says "pay or we'll take your collateral".
Whether a person sells the house for less than they owe, or transfers ownership through a foreclosure or dees in lieu, it's the same effect. Borrower defaults, and a portion of the balance is written off. This is what happens in bankruptcy and no one is saying bankruptcy is "wrong".
I will say this until the day I die. There is nothing "wrong" with walking away from a mortgage. There is no moral component here at all.
A mortgage doesn't say, "pay or you're a bad person". It says "pay or we'll take your collateral".
Whether a person sells the house for less than they owe, or transfers ownership through a foreclosure or dees in lieu, it's the same effect. Borrower defaults, and a portion of the balance is written off. This is what happens in bankruptcy and no one is saying bankruptcy is "wrong".
1
Posted on 10/11/12 at 10:19 am to ZereauxSum
quote:And in full recourse states, after it says the above it also says, "And if the collateral is sold for less than the loan value, we will then pursue all legal means to collect the difference from you."
It says "pay or we'll take your collateral".
The vast majority of U.S. states are full recourse states, btw.
I don't consider walking away from a loan as a "moral" thing. "Moral" connotes a religious based concept. I don't think it is religious.
But to me, it is a business ethics issue.
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