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Kaidran
Joined: 17 Mar 2010
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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 Posted: Fri Jul 09, 2010 3:25 pm GMT Post subject: |
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I think that the "business decision" is made when you sign your mortgage and whether or not you honor your agreements when you are fully capable of doing so is very much an ethical decision. If you are truly in a bad place financially and walking away would give you hope, that is why foreclosure exists in the first place, and I see nothing wrong with walking away then. However, if you can afford your mortgage and choose not to pay it simply because it will save you money, then you are breaking your contract and abusing the safety net set up for those with actual hardships. None of the mortgages I have seen cast walking away as a payment option - it is the penalty for breaking your agreement.
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balor123
Joined: 08 Mar 2008
Posts: 1204
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| Posted: Fri Jul 09, 2010 4:46 pm GMT Post subject: |
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| Quote: | | From the response, you'd think that homeowners somehow have an inalienable right to any and all opportunities to stay in their homes, whether it requires lower monthly payments, interest rate reductions, or even outright writedowns of mortgage principal....The better argument against the move is the practical one: that by locking out strategic defaulters, that set of prospective future buyers disappears, which could further destabilize the housing market and push prices down further. |
So the author doesn't think that homeowners should have a right to stay in their homes but they have a right to a home price which only monotonically increases? I actually disagree with barring for 7 years, mostly just because it is highly arbitrary. Instead, I would propose that the cost of borrowing rapidly rise with each foreclosure, regardless of the reason. The buyer can always live somewhere, then, but the places get less nice each time.
I find the policy of propping up housing prices highly objectionable, both as a prospective home buyer and I imagine as a future homeowner. The role of government should be to reduce the cost of living of citizens over time, thereby increasing the standard of living. While there's a variety of ways of accomplishing this goal, a good way is with taxes. The ideal scenario is very high property taxes with minimal interest rates. We already have the low interest rates and governments need the money anyway so it seems like the perfect storm has arrived to finally fix the American housing machine, no? |
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