Is It Ethical to Walk Out on a Mortgage?

[Mircea]

Originally Posted by le roi

Yes, it is unethical. The individual signed a contract - a promise - and then willfully failed to hold up their end of the contract.

The fact that you are, in a literal sense, "Operating within the terms of the contract" might make it legal, but does not make it ethical.

Good point.

Originally Posted by Fighter 1

NO ! unethical is what realtor and appraisel agents did falsely stating what a property was worth, as that the buyer could expect it to increase at least 20% per year .

And how did your real estate attorney advise you on that?

You didn't have a real estate attorney?

Well then you're too immature to own your own home.

You couldn't afford a real estate attorney?

Then you aren't financially ready to own a home.

At any time you so desired, and as common sense would dictate, you can hire your own real estate appraiser. If you can't afford your own real estate appraisal, then you aren't financially ready to own a home.

If you don't understand the home buying process, you can do your own research. There's internet and public libraries and if you don't know how to do you own research, then you aren't mature enough to own a home. Stick with apartments, because things like hiring roofing contractors and getting permits for in-ground pools, and hiring electricians and landscapers would just weird you out.

Originally Posted by cohdane

2. If you can't fully afford to pay the mortgage and the choice is walk away or stay while everything you own rots away under the weight of the payments: ETHICAL. Eventually, the bank is getting the house anyway. This way, you're not being a deadbeat living there and not paying for it. You tried your best or were ignorant and got in over your head. You can't afford it. You're trying to stay afloat. Good (albeit ill-advised) faith.

That would be stupid.

A better way would be to file bankruptcy. I have a minkey, a pet chimpanzee that has the brains to string a bankruptcy along for 2-5 years.

During that time, you use the Stay of Execution to:

1] seek a lender to refinance the mortgage to lower the payments so that they are affordable; or

2] beg family and friends for money to pay off a chunk and then refinance the mortgage so that payments are more affordable; or

3] arrange the sale of the home to pay off the mortgage note and get you out from under the debt.

Once you do any one of those three things, then you simply file a motion to withdraw the bankruptcy, and no harm done.

See, it isn't rocket science.

Originally Posted by old_cold

I've had to change my mind about this.
Instinctively, I would always have said it's unethical.
Reading opposing viewpoints here made me re-examine the issue and I voted that ethics don't enter the picture....it's strictly business.

And what, business operates in the vacuum of ethics? Right.

It would be hypocritical then to expect businesses to operate ethically.

Originally Posted by Humboldt1

I put 20 percent down on both of my properties. My decision to walk away and at a very minimum force a loan modification makes financial sense as I bought in 2003 and 2006. By the time it is all said and done I may break even and recoup my down payment money. If I get a little more by dragging this out further (24 months of no payments is my breakeven to recoup down payment money) that is gravy.

Um, what idiot thinks owning a home is an investment?

The purpose of owning a home, is that it costs less than renting.

At one point in time, I was paying $150/month for a one-bedroom apartment, while my parents paid $79/month for a 3-bedroom home.

I left the US and came back 10 years later and I was paying $350/month rent for a 1-bedroom, while my parents were still paying $79/month for their 3-bedroom home.

And then 10 years after that, I was paying $425/month for a 1-bedroom apartment while my parents had a 3-bedroom home and paid nothing.

Get it?

Again, it's not rocket science. A chimpanzee can grasp the concept.

Originally Posted by Fighter 1

Why Is it any different ( unethical ) to walk away from your obligations, when the political officials we elected and who swore an oath ( contract) to for-fill their duties as elected officials and they fail to comply with that promise ( walk away), and people accept that type of behavior? Is that promise less important?. Do as I say not as I do ?

It's different because you elect political officials. Just thought I'd point that out since you seem to have totally ignored that.

Originally Posted by Humboldt1

I just watched parts of Suze Orman special where she advised underwater homeowner to do shortsale but to do it before 2013 and only if it was non-recourse 1st mortgage.

Then I would do exactly the opposite of what Suzie Whoreman says.

Originally Posted by Humboldt1

When someone such as Orman who is obsessed with FICO scores is advising to look at shortsale, look out if people really catch on to what is going on with home prices and the advantages of strategically defaulting.

That's a very astute observation. I must recant all the nasty things I said about you.

[Fighter 1]

[quote=Mircea;19468881]Good point.



And how did your real estate attorney advise you on that?

You didn't have a real estate attorney?

Well then you're too immature to own your own home.

You couldn't afford a real estate attorney?

Then you aren't financially ready to own a home.

At any time you so desired, and as common sense would dictate, you can hire your own real estate appraiser. If you can't afford your own real estate appraisal, then you aren't financially ready to own a home.

If you don't understand the home buying process, you can do your own research. There's internet and public libraries and if you don't know how to do you own research, then you aren't mature enough to own a home. Stick with apartments, because things like hiring roofing contractors and getting permits for in-ground pools, and hiring electricians and landscapers would just weird you out.



That would be stupid.

A better way would be to file bankruptcy. I have a minkey, a pet chimpanzee that has the brains to string a bankruptcy along for 2-5 years.

During that time, you use the Stay of Execution to:

1] seek a lender to refinance the mortgage to lower the payments so that they are affordable; or

2] beg family and friends for money to pay off a chunk and then refinance the mortgage so that payments are more affordable; or

3] arrange the sale of the home to pay off the mortgage note and get you out from under the debt.

Once you do any one of those three things, then you simply file a motion to withdraw the bankruptcy, and no harm done.

See, it isn't rocket science.



And what, business operates in the vacuum of ethics? Right.

It would be hypocritical then to expect businesses to operate ethically.



Um, what idiot thinks owning a home is an investment?

The purpose of owning a home, is that it costs less than renting.

At one point in time, I was paying $150/month for a one-bedroom apartment, while my parents paid $79/month for a 3-bedroom home.

I left the US and came back 10 years later and I was paying $350/month rent for a 1-bedroom, while my parents were still paying $79/month for their 3-bedroom home.

And then 10 years after that, I was paying $425/month for a 1-bedroom apartment while my parents had a 3-bedroom home and paid nothing.

Get it?

Again, it's not rocket science. A chimpanzee can grasp the concept.



It's different because you elect political officials. Just thought I'd point that out since you seem to have totally ignored that.



Then I would do exactly the opposite of what Suzie Whoreman says.



That's a very astute observation. I must recant all the I stated .

Response ::
They entered into a contract where they promised things and gave their word, then did not fore-fill their promised obligations. (walked away).They entered into a contract with the people . Nothing has been ignored, just facts.

[mortimer]

Originally Posted by Humboldt1

Many realtors and mortgage brokers were in cohoots.

It doesn't matter.

The home buyers, speculators, brokers, etc. were just responding to market
conditions and approved business practices that were put in place by the
banks who were ultimately bailed out. Without the enabling behavior from
Wall Street, none of it would have been possible.

I'd also like to remind people that realtors help people buy and sell houses.
They don't predict the future or time the market. The people who do that
are real estate investors. Realtors can also be investors, but generally,
they are just trying to earn a living doing a difficult job ( if done right ).

Being a real estate investor doesn't mean you know anything worth knowing
or are any good at it, BTW. The same goes for any other profession or pastime.

Originally Posted by Mircea

Um, what idiot thinks owning a home is an investment?

Oh! ... Oh! ... ME! I do!

I think that any time I am in control of an asset worth hundreds of thousands
of dollars and is owned using leverage, that is an an investment. Whether it
is where I live, going up in value, going down in value, is irrelevant.

I think people that don't consider such a thing to be an investment an idiot. I do. I really do.

Let's see; I took over $100k cash and plunked it down on my current house, but it's NOT an investment?

R-i-i-i-i-i-ght. Who are such people that can do that anyway? Paris Hilton?

Even my automobile is an investment. It's a really poor one and one that
I expect to go down in value. That is why when I make that investment,
again I'll buy another 10-year-old car and drive it for 15-20 years.

Lessee; some people buy a house because they believe it's cheaper than renting.
I buy a car because it's easier than walking most of the time. It's still an investment.

[davehalo]

this is an awesome discussion...i restarted it last week as no one had posted in 2 years. attitudes and opinions have changed. for us "deadbeats" out there, please take a moment to chuckle at those calling us names. The Mortgage bankers Association walks away from their own building, BoA walks away from major real estate holdings in SF, etc, etc

People...put your words in actions. my guess is that "you" know family and friends who are deadbeats...stop associating with them. "we" know that major companies are deadbeats...stop buying their products and services.

get off your high horse, soap box, etc because until you walk in someone elses shoes...you do not know what you will do.

btw...divorce cost me easily 45% of household income. i stopped paying beginning with 12/1/10 payment. lender wouldn't look at SS offer without tons of my financial data...attorney advised me not to provide it. now that i know FICO has changed their model to nail people like me (model assumption looks at FICO score prior to SS, deed in-lieu, foreclosure) and hits high scores harder. so another disincentive to work with a lender....

my lender can have the house as my credit score is hit the same name regardless of what i do. best thing for me....bad for the lender. no common sense in this industry as a whole.