Homeowners weigh morality of walking out on mortgages

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ORLANDO, Fla. (RNS) Lynn Thompson quit paying the mortgage on her investment property — not because she couldn’t afford the payments, but because she thinks walking away is better for her long-term financial health. Thompson bought the property here for $175,000 in January 2007, just as the housing market began its slow downward slide. At […]

  • Hope

    From reading the article of the pharmacist it suggests/implies that she has a negative amortization on the home she bought. That is the only way she would likely still be underwater 10 years from now……….if the amount she owed continues to grow.

    We must separate those that are walking away into like-kind buckets.
    Are they walking away from a house that they can make the payments but resent that it is not of the same value that they once had? And that they can now rent that same house for far less than their payments and the write-off value of holding the house does not offset the gap between their mortgage payment and the rent? GROUP TWO

    Another group are those that got into a mortgage that enabled them to get into a house they otherwise could not afford. The lender provided them a teaser rate and a program ……..selling them on the idea that they can refinance in a year or two OR sell in a year or two……getting away with “CASH, sweet!” This impetus is different than the former one described above. GROUP TWO

    Then there are the folks that refinance and refinance and refinance, debt consolidating again and again ……..poorly managing money and living beyond their means. No one told them this was not sustainable. They continued to pursue the next pot of gold. …….. GROUP THREE

    Then and perhaps lastly, there are the ones that refinanced or bought and then…….lost their job AND faced a downturn and could not balance it all………..GROUP FOUR.

    Each of these groups on the surface, from a paperwork perspective all look alike YET, their circumstances are different and likely their subsequent response is different. When considering the groups above, we can quickly see the differences and the morality dimensions. We must therefore, understand the persons rationale and if we are to determine any value-proposition (culturally, ethically, socially, religiously) we must do it from within the understanding who we are talking about.

    My thoughts.