First mortgages used as ATMs, now they are free rent.

I believe it is very immoral to walk away from any debt. Here is MY logic.

When I give my word, which is a PROMISE, by a verbal discussion, or by signing a paper, I am bound to my WORD in a COURT. If I do not, in good faith, keep my PROMISE I can be sued and taken to court, fined, and in some cases even serve JAIL time. We have a HUGE system of lawyers and courts that JUST deal in contract law. It is a serious thing to go into a contract.

Mortgages have been streamlined for many reasons, but in most instances, a foreclosure still ends up in front of a JUDGE and there are many things that happen to a person when they do not hold up their end of a CONTRACT.

When a CONTRACT means nothing to us in a society anymore, the society cannot continue in a business since. We have seen this happen in many governments, usually because the government itself does not hold up their end of their CONTRACT with the people, and in the process they distroy the economy and social and moral structure.

We are bound by our WORD, our PROMISE and our MISTAKES and if we as Americans are not careful with our actions and the laws we set, we can DISTROY what we have.

Maybe we should be less reliant on debt in America and pay cash for everything because no one can be trusted to their WORD or their PROMISE on a contract. If that does occur, it will be a HUGE paradyme shift which consquences are hard hard to imagine.

I'm with you on this one.  I think we can quibble about whether it's a moral issue or not.  However, it is definitely an issue of personal responsibility.  CHOOSING to not pay your mortgage is different from people who truly cannot afford to pay.  I have a difficult time respecting people who choose to not pay while continuing to enjoy other luxuries.

Coral, I read the article you referred to and I too was disturbed by the tone.  One family even blamed the bank for their problems because it allowed them to borrow money to spend as they saw fit.  This fiscal crisis seems to be dividing people into two camps - those who still believe in paying their debts and living by their word and those who feel it is perfectly all right to pick and choose which of their responsibilities and legal agreements they will honor.  Oh, wait..."honor" seems like the wrong word to use here.    

Coral,

I've been back to this post four times now and I still don't know how to comment. There is validity in both sides of the issue. In the case of you can pay, but don't, I find that reprehensible.

Rich

Michael, Just walking away from a home is not in your best interest.  Until the bank forecloses, you are responsible for the home.  If you walk away and someone breaks in and harms the house, you are responsible.  If a pipe breaks, you are responsible.  If someone get injured, you are responsible

It is not just pay the mortgage. It is pay the mortgage or lose the house.  You have an option.

Our economic system is built on the premise that everyone does what they think is best.  If everybody acts that way then society as a whole benefits.  Due to reserve requirements and having to mark to market, banks are doing what they think is best.  Sometimes it means not foreclosing.  The consumer should do what they think is best.  Sometimes it means not paying the mortgage.  Both sides in a transaction should do what they think is best.

You have fallen into a trap cleverly set by the bankers; and that is looking at a mortgage as a religious document, with terms set by those on high, which if you violate them you will be damned. Balogna!.....a mortgage is an agreement between two parties with terms and conditions for each to follow and with consequences if not followed. The borrower absolutely has the right not to pay as long as he accepts the consequences (foreclosure). 

 The fact that the bankers cant get out of their own way and get the job done quickly, is a bonus

In fact you have every right to just walk away so long as you are willing to deal with the consequences.  And in the article mentioned the people are well aware of the consequences.

Michael, that statement is actually false...  You don't have a "right" to skip paying your debt as long as you are cool with the consequence, just as you don't have a "right" to speed if you are willing to pay the speeding ticket. 

You have a contractual obligation to repay the debt, and foreclosure is the enforcement mechanism.  It isn't a moral obligation, but it is contractual. 

Would you feel the same if the lender decided that they didn't want to live up to their portion of the contract?  What if they determined that you needed to pay the balance off before the loan were due?  Would that just be fine?

THANK GOD... 90% of the realtor comments here are right on the money. There is NO MORAL CONTRACT. The bottom line, if your broke, you can walk away!

Sorry Coral, you may disagree! Maybe you have paid your mortgage on time every month. You Have every right to be proud of that. I know it must make you angry that you did "the right thing" and everyone around you is having a free ride. I can understand!

The fact is, others who live for free for the next 2 years due to non payment of mortgage is completely legal and WITHIN THE CONSTITUTION!!!!

Sorry honey!

I read that article and found it interesting.  I think whats hard to tell is what liberties the writer took when interviewing the couple.  It seemed that the writer wanted to portray them as spending all of their money on going out and having a good time now.

I read a similar article that proclaimed that owners currently not paying their mortgage were actually STIMULATING the Economy by putting those mortgage payment dollars to work in OTHER consumer goods !!!

Coral, signing a contract is a responsibility that one will fulfill the terms of the contract to the best of their ability. Intentionally walking away shows a lack of this responsibility. These people may have beat the system now because it is a so called business decision, but in the long run it will impact their character.

We have really lost a sense of moral obligation in this country for some reason. I hope we can get it back. Good post!

Coral, you have brought about some great conversation.  Mortgages are a contact that is entered in to as an obligation to pay under set terms.  Unfortunately, some people were put into mortgages they never should have had, where not qualified for or even homes that were over priced.  I don't see this as the topic at hand. 

You are disscussing strategic forclosures (those who have the ability to pay and choose not to) which are becoming an issue not just with the banks.  A forclosed home not only effect the bank, but also the broker or banker who did the transaction as well as all the other home values in the area. 

Entire neighborhoods are being effected by those people who choose not to pay.  The banker/broker who did the transaction by have to buy the loan back, they don't have the money to pay and they go out of business causing further job losses and more foreclosures by those people who can't pay their mortgages.

This is a vicious cycle that continues.  The homeowner my think they are sticking it to the bank and helping themselves, but in the end they effect many innocent by standers; not to mention the effect on their credit and the likelihood no one will want to rent to them at a reasonable cost.

This is why I laugh when I hear the term, "responsible journalism"!

Morality aside, the contract/mortgage states clearly what will happen if the borrower doesn't pay, the bank then has the right to take the home.  I understand the concerns you've raised, but what about someone who has lost their retirement in the current market who is 65 years old?  The person can still pay the mortgage but when retirement comes next year or 10 years from now, will have no income.  Or, the borrower can walk from the house and save for the inevitable retirement.  Is this immoral?