This might be considered a controversial post by some. These are very troubling times in the real estate business and the core principles of property ownership are constantly being threatened.
I have never purchased real estate, nor represented a client in the purchase of real estate, in which it was not clearly understood that if a loan was obtained to purchase the property, the property would serve as collateral in the event of a default.
In EVERY closing in which I have ever been a participant, the exact phrase “you don’t pay, you don’t stay” has always been enunciated in plain language to the borrower.
In the state of Georgia, the borrower signs a “Deed to Secure Debt” and a “Waiver of Judicial Foreclosure,” which conveys title until the debt is repaid. Once again, this is clearly understood by the purchaser.
Somewhere along the line the perception that the obligation to “pay” has become optional, while the right to “stay” has become firmly entrenched into common culture has evolved into the accepted norm.
As a result, borrowers are defaulting by choice and not by necessity. Which is fine as long as the collateralized property is forfeited, and any subsequent deficiency judgments are paid.
But to “ride it out” and force the former lender to incur additional expenses only contributes to the rapid overall decline of both the real estate market and jeopardizes the availability of future money for mortgages.
Right and Wrong should NEVER be a matter of who has money and who does not. I have always believed that MY word is my bond and it is not affected by the actions or behaviors of others.
Even if it costs me money, I will keep my word.
Am I just being stupid? Do I need to get with the program?
What am I missing here?