Is It OK To Walk Away?
By Mary Kane
02/01/2008
10:01AM
As I mentioned in an earlier post, the Financial Times has a great piece noting the tendency of borrowers now to walk away from their homes, even if they could still pay on the mortgages. It's particularly true in cases where borrowers owe more than their homes are worth.
This of course raises the question: Is it ever morally acceptable to walk away from a debt ? Has it become socially acceptable?
In California, there's also the phenomenon of international foreclosures, where borrowers over their heads on their own loans deliberately stop paying in order to buy a cheaper forcelosed house on the market.
This debate already is well underway on the blogosphere, here, here and elsewhere.
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© 2007 The Washington Independent
Comments:
Posted 02/01/2008 11:05am with
Jingle Mail, Jingle Mail, Jingle all the way…
Personally, I feel it’s not moral. Likewise, I don’t think it’s moral for insurance companies to cancel coverage merely because a person is no longer an acceptable risk.
While one might feel this is corporate America getting its comeuppance, read John Quiggen’s discussion on how the mortgage industry in many instances favors the borrower.
Posted 02/06/2008 05:10pm with
I heard a first person account of a guy who walked away from a home loan because he was upside down. Relatively shortly thereafter, he bought another house. He applied for another loan and when they asked him about it, he told them straight up, “it was a business decision, there was no incentive to keep the loan”
He had no trouble getting the second loan.