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Walk away from your mortgage? Time to get 'ruthless'

Discussion in 'Political Discussion' started by PatriotsReign, Jun 7, 2011.

  1. PatriotsReign

    PatriotsReign On the Roster

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    I have absolutely NO issues with anyone who walks away from their home if it's in their best interests financially. After all, isn't that what businesses do all the time?

    It's nice to see that it may even become socially acceptable.

    Walk away from your mortgage? Time to get 'ruthless'

    Walk away from your mortgage? Time to get 'ruthless' - Jun. 7, 2011

    "NEW YORK (CNNMoney) -- Should you keep paying your mortgage on a home that's dwindling in value?

    No way, say an increasing number of underwater homeowners who are voluntarily choosing to "walk away" from their home loans, a practice known as "strategic default."
  2. chicowalker

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    I used to have a problem with it.

    Not sure I do anymore. As you say, it's business.

    it's not as if you know the loan officer anymore, and banks don't care about the vast majority of their "relationships," so why should that responsibility be a one-way street? (especially in light of foreclosure tactics that have been questionable at best)

    still not sure I'd do it, but that's personal choice.
  3. mcgraw_wv

    mcgraw_wv Rookie

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    It is a business decision. Supply and Demand, there is so much supply, and nearly no demand that if someone was down 30% on their house, it makes no sense to pay on something that isn't worth that... you are literally throwing away money.

    I am in that situation, but I like my house, and wouldn't consider it, were just aggressively paying down the mortgage so we save as much interest as possible.

    But other people, you have to do what's best for yourself. The Bank took a risk as well giving you that loan, and their collateral is the house.
  4. Mrs.PatsFanInVa

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    #24 Jersey

  5. PatriotsReign

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    I guess if we look at someone's future and their ablility to retire at a decent age and a decent standard of living...why should one feel obligated to pay a mega-corp. bank and sacrifice their own future?

    I believe that whatever legal means a citizen has to maximize their personal wealth is ok. I put ME before any corporate debt when it comes to my future.

    "If I am not for myself, who will be for me?"
    Last edited: Jun 7, 2011
  6. PatriotsReign

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  7. Mrs.PatsFanInVa

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    #24 Jersey

    You cannot quote part of a quote and make it mean whatever you want, PR.

    In this case, the entire quote is:

    "If I am not for myself, who will be for me?
    And when I am for myself, what am 'I'? And if not now, when?"


    I could go into a long Talmudic type explanation - but I figure, why bother? Suffice to say it doesn't mean what you want it to mean and it doesn't stand alone.

    Interesting you'd quote Hillel, however, in a thread about walking away from your debts since he is most famous for Pruzbul - an edict which overroad the cancellation of debts in a Sabbatical year and ensured the repayment of loans - because he firmly believed in legally protecting both the creditor and the receiver of the credit.

    Hillel's authority was sufficient to introduce those decrees handed down in his name. The most famous of his enactments was the Pruzbul, (προσβολή), an institution that, in spite of the law concerning cancellation of debts in the Sabbatical year (Deut. xv) ensured the repayment of loans. The motive for this institution was the "repair of the world", i.e., of the social order, because this legal innovation protected both the creditor against the loss of his property, and the needy against being refused the loan of money for fear of loss.

    Hillel the Elder - Wikipedia, the free encyclopedia
  8. PatriotsReign

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    I most certainly can and did use those words to reflect my belief. Hillel doesn't own those words nor their meaning.

    Because if I am not for me, then who will be for me? It means what it means in the context of it's use. I'll give you the fact I should have left out the quotations.

    So, do you believe a person should honor his/her debts despite their own hardships? Specifacally, do you believe it would be wrong for 2 parents to walk away so they have a better chance at sending their children to college or enjoy a decent retirement?
    Last edited: Jun 7, 2011
  9. Mrs.PatsFanInVa

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    #24 Jersey

    I believe that we are responsible for our choices - those we'd like to make as well as those we've already made. They've already chosen the house - why should they get to re-choose at some later date? The trade-off's you make when you buy a house is something you should have seriously considered before you purchased it, not after.

    Lots of people don't get to send their kids to college - that's not the bank's fault for loaning them money, is it? Nor is it the bank's responsibility to send their kids to college. The bank does have a responsibility to all of their customers, however, and if enough people default on their loans then the bank collapses - and leaves a multitude of other people stranded and in harm's way. Is that the bank's fault or is it the fault of the numerous defaulters?

    We have responsibilities to our children, sure, we also have responsibilities to our neighbors and our creditors. Every home that's abandoned becomes a drain on the neighborhood it sits in. Once it is neglected it falls into disrepair - and property values around it fall. If it is a condo or a townhouse which is defaulted on there are no longer homeowner association fees being collected - this raises the fees to all the remaining residents. How fair is it to them?

    If someone loses a job, becomes seriously ill, is disabled - I have no problem with them defaulting - they have no real choice.

    However, if the choice is A) Honor my past debts or B) send my kid to Harvard instead of the local community college or C) have a bigger retirement nest egg - I'd go with A every time. It's called accepting responsibility for your own actions. It's what most conscientious adults do.

    Usually when you make your bed you really are beholden to lay in it.
  10. PatsWSB47

    PatsWSB47 Rookie

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    #12 Jersey

    Foreclosure is the legal contractual remedy for non payment of a mortgage. It is part of an entire agreement full of procedures and stipulations that both parties agree to by signing it. Morals are good, don't get me wrong. Sometimes the lender gets a taste of their own medicine though. Live by the letter of the contract and die by it too.
  11. PatriotsReign

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    Nice post mcgraw....it isn't an ethical question any more, I agree with you. No different than when a business declares bankruptcy and then re-opens under a different name.

    If you didn't like your home so much, sounds like you'd have no problem walking away.

    Down -30%?? What state do you live in?
  12. PatriotsReign

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    Those are great points PSB42. I never even thought about the fact that walking away/foreclosure is a term agreed upon by both parties. Thus making such a decision as moral as any legal agreement.
  13. PatriotsReign

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    As SB42 has stated, the bed is made by both the lender and lendee. You make the options sound far too moderate. For many, the decision is either

    "I pay for my kids college or I don't"

    or,

    "We retire at 65 or maybe never"

    Anyone who looks at their own family and worries about how their decision will affect his/her neighbors or unknown individuals somewhere prolly carries the weight of the world upon their shoulders, and that's not healthy at all for anyone.
    Last edited: Jun 7, 2011
  14. PatsWSB47

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    #12 Jersey

    It's not necessarily a moral decision, but it is a decision both parties had considered and agreed to as part of the contract. Either party may be hurt and either party may benefit. Imagine someone that has had a house foe 15 years and then falls on hard times and can't make payment any longer. Then the bank can foreclose and own a house worth many time more than the mortgage balance. Then someone else can walk away from a house that has been mortgaged to the max and has lost half it's value in the market. The bank gets left holding the bag on that.
    Last edited: Jun 7, 2011
  15. Mrs.PatsFanInVa

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    #24 Jersey

    Where did McGraw say it wasn't an ethical question? I must have missed that.
  16. PatriotsReign

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    Sounds like you agree with those that believe it is purely a business decision. My first gut feeling when I read the article was "I honestly don't care if Bank of America gets screwed with this"

    That is one bank I can't stand...just a personal opinion based upon experience.
  17. PatriotsReign

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    I think you did miss it. Mcgraw wrote;

    I may be wrong, but when someone tells me it's a business decision and you have to do what's best for yourself, they don't feel ethically obligated.

    If Mcgraw corrects me, I'll take it back and admit I was wrong.
    Last edited: Jun 7, 2011
  18. Mrs.PatsFanInVa

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    #24 Jersey

    Then perhaps they should have thought of that before they bought the house??? Or maybe start prepping the kids to understand that they're going to have to pay for their own college?

    Again, why do they think of this after buying the house and not before? Unless something happened which changed their income I don't see why all of a sudden it becomes a big deal and I already said if there's been an income change then I don't have a problem with defaulting.

    And anyone who doesn't instinctively understand that all of their actions are going to cause a reaction wasn't very healthy in the first place.

    How do you think allowing your home to go into foreclosure affects your family, PR? Do you think your kids are proud of you? Do you think they don't resent being forced to move? To maybe change school districts? To have their friends see a foreclosed or short sale sign in their front yard? To know that people either A) pity them or B) scorn them?

    Maybe adults really don't give a damn what friends and neighbors think - but I can assure you, their children do.
  19. PatsWSB47

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    #12 Jersey

    I have a conscious. I'd make every attempt to make payback. If I can't my conscious would be clear. Not so much if I purposely was sticking to them.
  20. PatriotsReign

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    Are you for real MrsP?

    Announcement: The US housing market is in a depression. Many markets have experienced declines in value over 40%....HELLO!?

    Since this has virtually never happened in our history, you still claim that people should have considered this? Seriously MrsP?

    So when you and MrP bought your house, I'm sure you discussed the possibility that it might decline 25% in value in 4-5 years....right?
    Last edited: Jun 7, 2011

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