Is "walking away" from a mortgage wrong? - Page 2 - TigerDroppings.com

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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Is "walking away" from a mortgage wrong?


quote:

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


I agree with this fully.

Why do you think so many people regard it as a moral obligation, though?






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ZereauxSum
LSU Fan
Lot 23E
Member since Nov 2008
8145 posts

re: Is "walking away" from a mortgage wrong?


quote:

But to me, it is a business ethics issue.


That's a fair point to make.

If the bank is willing to work out something and the borrower leaves them with the keys anyway, then that's not above board.

But most of the situations that we hear of are when the borrower has tried for months to restructure the loan or sell the property and the bank forecloses anyway. I think the business ethics argument gives both ways.






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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Is "walking away" from a mortgage wrong?


quote:

I think the business ethics argument gives both ways.


Of course it does. Banks don't necessarily have the best reputation in this area either.






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DrEdgeLSU
LSU Fan
Dallas, TX
Member since Dec 2006
5971 posts

re: Is "walking away" from a mortgage wrong?


(no message)


This post was edited on 10/11 at 11:37 am


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DrEdgeLSU
LSU Fan
Dallas, TX
Member since Dec 2006
5971 posts

re: Is "walking away" from a mortgage wrong?


The context of the quote was framed this way: "if she can pay for it, walking away is wrong."

Not sure if that changes the dynamic here, but does ability to pay make a difference?






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SlowFlowPro
Stanford Fan
Simple Solutions to Complex Probs
Member since Jan 2004
293985 posts

re: Is "walking away" from a mortgage wrong?


quote:

I think the business ethics argument gives both ways.

it does, just like the assume risk and the resulting damages

now i can see an argument for a moral issue if a bank DOES offer a new deal to a homeowner and THEN the homeowner walks away...or the homeowner misleading the bank in order to get "free" time living in the property. i get that. that's basically fraud/theft






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SlowFlowPro
Stanford Fan
Simple Solutions to Complex Probs
Member since Jan 2004
293985 posts

re: Is "walking away" from a mortgage wrong?


quote:

but does ability to pay male a difference?


not to me






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DrEdgeLSU
LSU Fan
Dallas, TX
Member since Dec 2006
5971 posts

re: Is "walking away" from a mortgage wrong?


It makes no difference to you, but one post above you call that theft. Just because you don't like your condo, I would consider it theft to stop paying a third party when you have the ability to do so.





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ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
6201 posts

re: Is "walking away" from a mortgage wrong?


Every situation is different. No way a blanket yes or no is the right answer





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ZereauxSum
LSU Fan
Lot 23E
Member since Nov 2008
8145 posts

re: Is "walking away" from a mortgage wrong?


quote:

Why do you think so many people regard it as a moral obligation, though?


That's a good question.

I think deep down everyone wants to stay in their home and honor their commitments. I think there is some since of "failure" that goes along with it, because once you could afford it and now you can't.

In my own experience, we really liked our house. We worked to get the loan modified but our lender couldn't meet us half way. So we did the short sale, even though I hated to do it.






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SlowFlowPro
Stanford Fan
Simple Solutions to Complex Probs
Member since Jan 2004
293985 posts

re: Is "walking away" from a mortgage wrong?


quote:

I would consider it theft to stop paying a third party when you have the ability to do so.

why?

it's a business decision. the contract doesn't state that you will get extra penalties if you could pay it and choose not to

the contract says they will loan you x principal at y rate and you'll pay z/month back over a certain period of time. if you fail to pay z, they'll seize the house (assuming non-recourse states).

the person walking away will suffer consequences as a result. the secondary effects will be a huge ding to your credit that will take a long time to recover from. second, they will have lost on what they had already paid in terms of downpayment

ability to pay doesn't matter. the question is whether the costs from leaving (described above) are less than teh costs from staying and paying timely. if the costs from leaving are lower, then you leave.






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AngryBeavers
LSU Fan
Member since Jun 2012
3425 posts

re: Is "walking away" from a mortgage wrong?


quote:

Why do you think so many people regard it as a moral obligation, though?


For some people Ethics and Morals are one in the same.






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SlowFlowPro
Stanford Fan
Simple Solutions to Complex Probs
Member since Jan 2004
293985 posts

re: Is "walking away" from a mortgage wrong?


quote:

For some people Ethics and Morals are one in the same.

other than the misleading i spoke of earlier, how is this an ethical or moral issue?

there is an agreement with defined penalties for breach. there are secondary costs to both as a result of the breach that are known before hand. where do ethics or morals come into play?






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AngryBeavers
LSU Fan
Member since Jun 2012
3425 posts

re: Is "walking away" from a mortgage wrong?


Not paying a bill when you have the ability to do so is unethical and immoral. That is just my opinion and the way I view it when I get into a contract.





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ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
6201 posts

re: Is "walking away" from a mortgage wrong?


Its ridiculous. If you come home and your wife is being trained by asian midgets, are you staying with her because of the kinship contract by marriage?

Every situation is different, get off your high horses. Not saying its always right, but certianly not always wrong to break a contract






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AngryBeavers
LSU Fan
Member since Jun 2012
3425 posts

re: Is "walking away" from a mortgage wrong?


quote:

ITNEVERRAINS


Your wife is the one who broke the contract in this situation. I would never be the first one to break a contract unless left with no other choice.






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Swifty
LSU Fan
Member since May 2012
947 posts

re: Is "walking away" from a mortgage wrong?


quote:

Your wife is the one who broke the contract in this situation. I would never be the first one to break a contract unless left with no other choice.


But would you be the first one to jump on the asian midget pain train?






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AngryBeavers
LSU Fan
Member since Jun 2012
3425 posts

re: Is "walking away" from a mortgage wrong?


Oh the midget would be dead





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Swifty
LSU Fan
Member since May 2012
947 posts

re: Is "walking away" from a mortgage wrong?


Its a train... there would be a lot of them.

New thread: How many half naked asian midgets do you think you can fight off at once.






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Crbello4Hiceman
LSU Fan
Lurking
Member since May 2011
438 posts

re: Is "walking away" from a mortgage wrong?


quote:

No. Not at all. It's a business transaction and it is the responsibility of the bank to underwrite appropriately for the risks. Bankruptcy is basically a put option on the loan and that information is known up front by the bank.


This.

If I rent a building for a year for a business and the business loses money, it is not wrong of me to go under and break the lease. Penalty fees are written into the contract in that case, same deal with mortgage. Foreclosure is factored in. They understand the risk when they loan the money, and frankly, as tight as they are on who can get loans right now, this will be a non-issue once all the old loans that are bad work their way out. You have to be pretty dang solvent to get a loan right now.






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