The Morality of "Strategic" Foreclosure
Wednesday, August 25, 2010
“These pragmatic decisions by companies to walk away from commercial mortgages come as a debate rages in the residential-real-estate world about "strategic defaults," when homeowners stop making loan payments even though they can afford them. Instead, they decide to default because the house is "underwater," meaning its value has fallen to a level less than its debt.”
“Banking-industry officials and others have argued that homeowners have a moral obligation to pay their debts even when it seems to make good business sense to default. Individuals who walk away from their homes also face blemishes to their credit ratings and, in some states, creditors can sue them for the losses they suffer.”
In its guide to walking away from your mortgage, businessinsider.com shares this tidbit when it comes to the morality of this practice:
“Besides the law, you may also want to consider the moral repercussions of backing out on your debts.
Just kidding! Everyone is doing it. Feel free to ignore this question.”
REALLY?! So, as many mothers told their children since bridges were invented...if your friends jumped off a bridge, does that mean you’d do it too?! Relativism at its best, folks!
As hard as it is to see past the world view of debt management...one thing keeps coming back to mind.
Therefore, it is necessary to submit to the authorities, not only because of possible punishment but also because of conscience. This is also why you pay taxes, for the authorities are God's servants, who give their full time to governing. Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor. Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law…whatever other commandment there may be, are summed up in this one rule: "Love your neighbor as yourself." Love does no harm to its neighbor.
~Romans 13: 5 - 10
Please don’t get me wrong…there is a big difference between not being ABLE to pay your mortgage and CHOOSING not to. As someone with a house in that negative equity zone – I too struggle with this.
But as I drive through my neighborhood and see those vacated homes with unkempt yards, I remind myself which world view I will choose to follow, not the it’s what’s best for me and its okay because everyone’s doing it view, but the eternal view that focuses on loving and not harming my neighbor.
Reader Comments (1)
Thanks for writing a post about this. You’ve got a bunch of wonderful information here on your site. I’m very! I have a few blogs that I try to keep somewhat ongoing myself but it is a struggle sometimes. You’ve done a good job with this one. How do you keep up?