Is It Morally Acceptable To Walk Away From A Mortgage?

I’ve heard this argument frequently cited “If you own an underwater mortgage, it’s irresponsible to default and walk away from your house.”

A mortgage should be treated like any other business arrangement.  If the contract isn’t working out for you, you should walk away.

The rules vary by state.  In a “recourse” state, your personal assets are also collateral for the mortgage.  If you have $20k in savings, and default on your mortgage, then the mortgage owner can also come after your $20k savings.  In a non-recourse state, your personal assets are not collateral for the mortgage.  That’s mostly a moot point.  Most people won’t default on their mortgage until they’ve exhausted their other savings.

When you default on your mortgage, you don’t get evicted right away.  You may live in your home for free, for months or years until the foreclosure process ends.

A mortgage contract says “You can stop paying, but we get to take your house.”  If your house is worth less than the mortgage, it’s acceptable to default and forfeit the house.

When you bought your home, there was an implicit agreement “The amount I paid is the fair market price.”  Banksters created a housing bubble.  They tricked you into overpaying for your home, by inflating housing prices.  Shame on you for being tricked.  Shame on the bank for lending you money on an overpriced house.

That’s how free markets are supposed to work.  If you lend money to someone who can’t pay, then you are stuck.

It’s also logically inconsistent.  Banksters caused the housing bubble.  They got trillions of dollars of direct and indirect bailouts.  When insiders gamble and lose, they get a bailout.  When non-insiders gamble and lose, they lose their home and your savings.

Why did banksters get bailouts, while individuals lose their homes?

Banksters committed massive mortgage fraud, in the “fraudclosure” scandal.  People were signing mortgage foreclosure paperwork, without even checking it was valid.  Not a single person was prosecuted for perjury, in that massive mortgage paperwork fraud.  However, you’re being irresponsible, if you decide to stop paying a mortgage on an underwater home.

There are two rules, one for insiders and one for everyone else.  When non-insiders are owed money, too bad.  When insiders are owed money, it’s a serious crisis to default.  It’s OK to walk away from an underwater mortgage.  The bank would not hesitate to cheat you.

8 Responses to Is It Morally Acceptable To Walk Away From A Mortgage?

  1. The FED announced annother round of “quantitative easing” this week. Disgustingly, I saw a new term used by the MSM this week, ridiculously referring to the Federal Reserve’s pumping more money into the economy as “giving donuts”.I have been encouraged by more people who are realizing that a Central Bank credit monopoly is bad for the country. Yet, that anyone can say with a straight face that printing more money, when debt is the biggest cause of our economic woes, is a plausible solution to “fix the economy”, shows just how far away the slaves are at understanding basic economics at the very least, and the existance of the biggest evil in their lives at the most.

    • I’m already planning a draft for “QE3″.

      “Quantitative easing” is a fnord phrase. If Ben Bernanke said “I’m printing more money and giving it to my bankster friends!”, that would be too obviously corrupt. “Quantitative easing” sounds noble and important and helpful.

  2. Yes of course. There was an attack on the US government’s ambassador to Libya and his entourage this week. The media said it was a “shocking tragedy”. Murder is deplorable, but is the attack all that shocking or surprsing? Mr. “Hope and Change” and “peace loving liberal” Obama mercilessly attacked Libya for many weeks, ruthlessly bombing and shelling that country killng thousands of people. I never consented to those attacks, nor did any other citizen. I can honestly say that I have never actually even met a Libyan citizen. Who are they to me? Who am I to them? I never had a problem with them. Funny how there is almost never an outcry for war and invasion unless the government spends millions of dollars and air time telling us why we should hate another people and how an attack on them is justified. Ghaddafi was a client dictator for decades, I guess until he outlived his usefulness like Hussein. Funny how the most brutal dictators in the world are “friends” of the US government for so long, until there are resources or strategic interests which render them then “terrorists”.

  3. “If Ben Bernanke said “I’m printing more money and giving it to my bankster friends!””

    This is incorrect. No one can print money. One can print paper, do note the difference. Money, can be a piece of paper that has a value.

    Can one print value? No. If one could, then we would not need to work, there would be instant communism. We would just concentrate our best efforts on creating the most powerful printing press in the world, and live happily ever after.

    Unfortunately for us, and fortunately for Bernanke, value can not be printed up. But, it can be stolen. Every freshly printed note that is spent into circulation or deposited in the bank to replace the missing reserve, immediately steals it’s value from everyone of us, who holds similar notes.

    So, you should have asked:

    If Ben Bernanke said “I’m stealing more money from the people and giving it to my bankster friends!”

    • You are confusing money and wealth.

      The Federal Reserve can create money.

      The Federal Reserve does not create wealth. Ben Bernanke claims that stealing via inflation “stimulates the economy” and creates real wealth. He is wrong.

      That’s the “advantage” of paper money. In a paper monetary system, insiders can always steal via inflation.

      With metal money, theft via inflation does not occur.

      • Except with the discovery of large, easily mineable resources of the metal – whereupon the owner of the resources can steal value via inflation.

        Potosi isn’t going to happen again, as the world’s gold and silver resources have been rather more carefully examined than they had been in 1492, but making over-general statements can result in malicious nit-picking, rather than the friendly sort I’m trying to use.

        • I’d much rather take the risk that someone will find a huge undiscovered gold mine (unlikely) than the risk that Ben Bernanke will print a lot of new money and give it to his bankster friends (guaranteed).

          Even if a huge new gold mine is discovered, labor is required to extract and refine the gold, limiting the inflationary effect.

          Even if someone discovered a cheap and efficient way to convert lead into gold (unlikely), people would drop gold and switch to something else. Until that extremely unlikely event, I’m sticking with gold.

          The point is that people should be free to choose whatever they want as money. I choose metal. If you want to pay me in Bitcoins or paper or whatever, I’ll accept it, adding on the transaction fee for converting to my preferred money. In the present, State laws and State violence force people to use State paper.

          If your preferred choice of money is genuinely liquid, it should be easily convertible to my preferred choice of money.

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>