loan defaults: So, Where is the "Moral Obligation" on Commercial Loans and Strategic Defaults? - 02/01/10 10:44 AM
There has been article after article and blog post after blog post on the subject of strategic defaults and the 'moral dilemma' of it (or lack there of, if that's your position).  Many believe that it is immoral for a person to decide to strategically default on their mortgage.Let's stop there for a minute and define strategic default.  In a nutshell, strategic default is when a borrower who is financially capable of making the monthly mortgage payment, decides to stop paying and let the bank foreclose on the property.People who think that it's immoral to make the decision to default strategically … (21 comments)

loan defaults: Foreclosure is in the Banks Best Interest...Shhh...It Just May be in the Borrowers Best Interest, too - 07/30/09 12:47 PM
Foreclosure is in the Banks Best Interest In a Washington Post article, Renae Merle said, "Government initiatives to stem the country's mounting foreclosures are hampered because banks and other lenders in many cases have more financial incentive to let borrowers lose their homes than to work out settlements."The summary of the article is that loan modifications are only profitable to lenders for one type of borrowers, but there are actually three types.The profitable borrower is one who cannot make the current payments, but can prove to be able to easily make payments on a new, modestly modified note.The second borrower is … (30 comments)