Many, many people have done this. They have a job, can afford the payments, but the home is worth less than what they bought it for, so they leave. I see it every single day. I think you need to get out in the world of lending, real estate and law, instead of sitting in your mobile home blogging.
What planet are you living on? Both parties signed a contract, which had penalties for failure to live up to the contract conditions.........[snip]
I have no sympathy or sense of obligation to the banks. We both signed a contract. If you don't live up to the contract, you suffer the consequences. Why is that such a difficult concept to comprehend?
I know of many situations where people received a loan from a bank, could pay it back, and choose not to. I have seen it with primary residence, vacation home and people who bought during the boom to flip houses and then got hosed. They got the money from the bank, they used the money and they have the money to pay it back, but they don't want to. If you haven't seen it, well, I can't help it if you don't know what you are talking about.
The truth is the bankruptcy laws do allow some people to act immorally, too. You just have a post-American view on morality, in which nothing is immoral. I once had a client who went through Chapter 11 reorganization, solved his financial problems, and then after he was doing well again, went and paid all his prior creditors the amounts they lost when he went bankrupt. Now THAT is an American sense of morality, the same kind that said, "no I won't take welfare" and "a man's word is his bond". The morality that made this country great, and made people honorable. That is, sadly, going the way of the dodo.
But you are right, in one sense. It is a commercial transaction, and people can choose to breach a contract and suffer the consequences. If he is wrong, he can pay damages, after forcing the other side to file suit and pay a lawyer and all those other things that our system provides for. I make my living on those cases, where someone disputes a debt or just flat out refuses to pay it. Where there is a legitimate dispute, it is not immoral to litigate, even if you are likely to lose. Where there is no dispute, however, it is considered a civil "wrong", for which sanctions can be awarded, to file a general denial to a Plaintiff's complaint for breach of contract. An attorney commits an ethics violation for helping a client delay paying a valid debt in that fashion. The proper response is to admit the complaint, not file an answer denying the allegations. (I actually have a situation like that right now, and I am fully intending to seek sanctions against the opposing party and may report the attorney.)
In the foreclosure setting, the party walking away is in the same moral position as someone who owes on a contract and who has no defense to it. If they choose to breach it, the consequences normally should be that they pay the bank the damages that result. The problem is that the laws, passed by leftists, have skewed the options available to banks so that they cannot recover the money easily from the borrower, and they cannot recover the money from the property, either. Due to federal interference with lending, they were forced to go to these relaxed lending standards and give loans where the bank was not protected by the value of the property or the income of the borrower. If you add to that mix borrowers that think it's ok to intentionally fail to repay a loan they have agreed to pay, even when they can, then you have a formula for the collapse of the US financial system. Which is what we have been having. You also have a situation that damages all the other borrowers out there, the good ones, the ones who honor their obligations because they gave a promise.
I think you are confusing whether it is "immoral" to intentionally breach a contract with whether it is criminal. I am not from the post-Sesame Street era. I was not raised by hippies. I still think it is wrong to give your word on a contract and then not honor it, even when you have the ability to honor it. Call me an antique, but I would bet that FReepers are more like me than like you. Your view is part of the rot.
By the way you are arguing so strenuously, I would guess that you did a walk-away, and are trying to justify it to yourself. True?
You got that right.
Ditto, great post.
Any real stats or just your personal observations? What percentage of the massive record foreclosures fit your description? Regardless, it is a private contract between the bank (lender) and the borrower. So why should I even care what motivates someone to walk away. The terms of the contract cover the consequences.
I think you need to get out in the world of lending, real estate and law, instead of sitting in your mobile home blogging.
I currently own three properties, my home and two rentals. This is my third primary residence. I understand what it means to buy and own property. FYI: I have never lived in or owned a mobile home. Projection?
They got the money from the bank, they used the money and they have the money to pay it back, but they don't want to. If you haven't seen it, well, I can't help it if you don't know what you are talking about.
So who cares? The bank made a decision to loan the money based on the value of the property and the credit rating of the borrower. Failure to pay means confiscation of the property and any equity the borrower had in the property. Every time money is loaned, there is a risk of non-payment.
I think you are confusing whether it is "immoral" to intentionally breach a contract with whether it is criminal. I am not from the post-Sesame Street era. I was not raised by hippies. I still think it is wrong to give your word on a contract and then not honor it, even when you have the ability to honor it. Call me an antique, but I would bet that FReepers are more like me than like you. Your view is part of the rot.
You can try and make this personal, but introducing morality into a loan, whether it is for a car or a boat or a home is not the issue. This is about individual choices and consequences. The contract terms determine accountability. A home loan is no more sancrosanct than any other loan. There is nothing to say that I must cash in my 401K, borrow more money from friends and neighbors, etc. to "honor" my obligations to the bank for the home, which is really the collateral for the loan. If the banks are losing money on these loans, then they made a mistake and should suffer the consequences.
By the way you are arguing so strenuously, I would guess that you did a walk-away, and are trying to justify it to yourself. True?
Never. Thankfully, I have a perfect credit rating. But I grew up in less than affluent circumstances. I am well off now, but I understand what it means when someone loses their job and must sweat every bill whether it is the mortgage payment or the electrical bill, etc. My parents grew up during the Great Depression.
I have had renters who didn't pay or damaged my property. I took appropriate legal action to get restitution, but I never have believed that they were morally obligated to pay me. We had a lease agreement. I took a risk renting to them despite due dilligence. End of story.
What I find morally reprehensible is the government using taxpayer money to bail out the banks and credit unions for making bad decisions.
I am really offended by your moralizing and personalization of the issue. Can't you discuss something without condescenion and personal attacks?