“Sure it might make sense...if you don’t mind reneging on your legal and moral obligations.”
Well my house is paid for, so I don’t have a direct stake in the issue, but I don’t believe there is a moral or legal obligation involved. It’s a business deal, nothing more. The buyer is betting (with encouragement from the “experts” that the prices will continue to go up, and the lender is betting that he will be covered even if you default. Also BTW, the buyer is paying the lender interest to cover the risk of a default, so there’s no “moral” issue when interest is paid on a loan.
As for the moral part, he lender didn’t loan you the money based on your “word”, he loaned it based on his ability to foreclose if you didn’t make the payments... And if he foreclosed and the property brought more than you owed, he would keep the extra cash.
As for the “legal” part, that’s what bankruptcy laws are for... There’s nothing illegal about going bankrupt.
For all you folks that think there is nothing wrong about this behavior, please add that statement to all of your load applications....
After all, if you fail to make your views known, you might then be a liar, or is telling the truth now “optional”?
CC
You should be glad your insurance company isn't allowed to see contracts the way you do. You'd be F*ed in at least one orifice by now.