# If you think it's OK to walk out on a mortgage that you can afford **URL:** \ **Category:** Great Debates\ **Created:** [January 15, 2010, 4:48am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047 "2010-01-15T04:48:46Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [January 16, 2010, 12:06am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/61 "2010-01-16T00:06:13Z")
> [@Nobody](#): > > Yes, I know that no-one is coerced. But just because the bank includes a clause to take back the house upon default of payment in order to protect themselves doesn’t mean that they’re happy if somebody defaults on the loan. Why should I be concerned whether the bank is happy or not? I am sure they will do what ever is in their financial interest without regard to my happiness. I would be a fool to treat them otherwise. ---
**Author:** ![begbert2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/begbert2/32/3357_2.png) [@begbert2](https://boards.straightdope.com/u/begbert2)\ **Post date:** [January 16, 2010, 12:18am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/62 "2010-01-16T00:18:12Z")
> [@Nobody](#): > > Yes, I know that no-one is coerced. But just because the bank includes a clause to take back the house upon default of payment in order to protect themselves doesn’t mean that they’re happy if somebody defaults on the loan. Especially if it’s not because the person can’t afford it. I’m willing to anthropomorphise the bank far enough to say that it “wants” the things that its rules and policies drive it to do and which profit it, like giving out non-defaulting loans, but I’m not willing to go so far as to say that the bank cares about your financial status if you should manage to legally default on them. To the bank you’re just an income or not - _why_ you bailed is irrelevent unless it impacts the business outcome in some way. And I’m willing to anthropomorphise the bank enough to say that it is “not happy” when circumstances alter to give it a nonoptimal (though agreed upon as acceptable) outcome to loan - but I’m not willing to anthropomorphise it enough to _care_ whether it’s happy or not. Now, in some cases I might also not care whether the _defaulter_ is happy, like if he was a speculator and merely pulling out of a bad investment - in that case it’s a wash. But that doesn’t mean them defaulting was _immoral_ - it means that the bank took a gamble in a business transaction, and lost. Whoopee. If a person actually _needs_ to save the money, of course, then there is even less reason to worry about the poor widdle bank. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [January 16, 2010, 12:45am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/63 "2010-01-16T00:45:14Z")
> [@Nobody](#): > > Yes, I know that no-one is coerced. But just because the bank includes a clause to take back the house upon default of payment in order to protect themselves doesn’t mean that they’re happy if somebody defaults on the loan. Especially if it’s not because the person can’t afford it. If it is not moral for a person to stop paying the bank if he can afford it, then surely it is not moral for a bank to foreclose on someone who can’t pay his mortgage if the bank can afford to let him stay in his house. Is that right? ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 16, 2010, 1:00am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/64 "2010-01-16T01:00:47Z")
Woohoo, walk out, and make banks even more lending averse. Yay! ---
**Author:** ![begbert2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/begbert2/32/3357_2.png) [@begbert2](https://boards.straightdope.com/u/begbert2)\ **Post date:** [January 16, 2010, 1:05am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/65 "2010-01-16T01:05:01Z")
> [@mswas](#): > > Woohoo, walk out, and make banks even more lending averse. Yay! Well, we want them to be more lending-averse than they _were_, back when the bubble was inflating. The fact that reality has a tendency to react to a giant shock with cyclic rebounds of gradually diminishing effect is a perhaps unfortunate fact, but it’s just the way things are. ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 16, 2010, 2:07am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/66 "2010-01-16T02:07:36Z")
> [@begbert2](#): > > Well, we want them to be more lending-averse than they _were_, back when the bubble was inflating. The fact that reality has a tendency to react to a giant shock with cyclic rebounds of gradually diminishing effect is a perhaps unfortunate fact, but it’s just the way things are. Yes, but now they are not lending very much, even though the entire point of that stimulus we paid for is not occurring. ---
**Author:** ![Zephyurs](https://avatars.discourse-cdn.com/v4/letter/z/dfb087/32.png) [@Zephyurs](https://boards.straightdope.com/u/Zephyurs)\ **Post date:** [January 16, 2010, 2:25am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/67 "2010-01-16T02:25:44Z")
mswas, you’re conflating the stimulus with the TARP package. The stimulus adds to aggregate demand; though in some indirect sense it might have a side effect of increasing lending, that’s not the direct purpose. ---
**Author:** ![wonky](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wonky/32/393_2.png) [@wonky](https://boards.straightdope.com/u/wonky)\ **Post date:** [January 16, 2010, 3:52am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/68 "2010-01-16T03:52:03Z")
Banks make the money they do by being willing to take the risks they do. If you get rid of the risk to the lender, you’d see the First National Bank of jsgoddess open up tomorrow. ---
**Author:** ![The\_Second\_Stone](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@The\_Second\_Stone](https://boards.straightdope.com/u/The_Second_Stone)\ **Post date:** [January 16, 2010, 7:15am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/69 "2010-01-16T07:15:20Z")
> [@Nobody](#): > > According to your logic, in order not to judge then you must think that everything is OK. If you see somebody robbing a store, you can’t say it’s wrong because that’s a judgment. If you see somebody mugging somebody else, you can’t condone it because then you’d be judging. I think that perhaps you have not read my comments together and in context. Robbing a store is morally wrong because it is a violation of criminal wrong. Same with mugging. Applying for a loan with false documentation is a wrong. It carries moral approbation as well as legal penalties. As a Christian, if it is not my job to prosecute or judge these people, I can denounce the general actions, but I must love the individual actor. But I don’t think I have any business going around thinking I am better than say “adulterers” who exist and are committing immoral acts. I am no better than an adulterer, and no worse. (I’m guilty of many sins, but adultery is not one of them (yet), so this is a good example.) Now adultery is specifically proscribed by my moral code, and in general the moral code of most people. I’m pretty sure that it is proscribed by one of the Commandments. So for Christians and Jews (and maybe Muslims, I don’t know) the Ten Commandments proscribe it specifically and in writing. I am not aware that defaulting on debts falls anywhere into the 613 (approx) commandments recognized by the Jews, perhaps it does, I don’t know. But I do know that I am commanded by Jesus not to judge or stone the adulteress unless I am free of sin, which we all know that I and thou are not. Now do I occasionally make casual (and often mistaken) judgments. Yes, you betcha. But when I do it makes me look like a complete ass. I might even suggest that when I see others do it, that it makes them look like an ass in my eyes. Which of course is the same sin on my part again: Judge not lest ye be judged. But what am I supposed to do, ignore it and its caustic effect on the everyone around us? It is similar to being at a social gathering and someone starts making borderline racist remarks out of ignorance. The feeling to me is the same. Do I say nothing and hope things move on quickly? Do I condemn it so that people see I don’t approve and possibly make the ignorant utterer uncomfortable and provoke more? How about someone goes on about fornication? About how poor people shouldn’t have more children than they can afford to raise “right”? None of us are so high and mighty that we cannot use a little humility now and then. ---
**Author:** ![The\_Second\_Stone](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@The\_Second\_Stone](https://boards.straightdope.com/u/The_Second_Stone)\ **Post date:** [January 16, 2010, 7:25am UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/70 "2010-01-16T07:25:15Z")
> [@tomndebb](#): > > You have made it quite clear that you are offended. > > However, this is Great Debates and not the BBQ Pit and whether or not you are offended is not germane to this discussion. You have also gone a long way towartd making this discussion personal, which is quite unnecessary as well as treading far too close the the line of personal insults. > > Back it off and leave the personal comments out of Great Debates. > > [/Moderating] My humblest apologies for making explicit my personal feelings in Great Debates. I will endeavor to review my posts before posting them to leave my personal feelings out of Great Debates posts. Please forgive me. I am grateful that you have recognized that I have come close to the line of personal insults, because I go to great lengths not not cast personal insults in Great Debates as it is against the rules, and actually go across that line, which I haven’t done, and you don’t contend I did, or intended. To anyone who might have been offended by my expression of my personal feelings (or opinion), I offer my sincerest apologies. ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 16, 2010, 3:54pm UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/71 "2010-01-16T15:54:53Z")
> [@Zephyurs](#): > > mswas, you’re conflating the stimulus with the TARP package. The stimulus adds to aggregate demand; though in some indirect sense it might have a side effect of increasing lending, that’s not the direct purpose. TARP is the name of a particular stimulus package. ---
**Author:** ![Defero](https://avatars.discourse-cdn.com/v4/letter/d/8797f3/32.png) [@Defero](https://boards.straightdope.com/u/Defero)\ **Post date:** [January 16, 2010, 7:30pm UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/72 "2010-01-16T19:30:35Z")
It’s fine to walk away from your mortgage for any reason at any time. There is not a contract in the sense of the above example of Conan O’Brien! It’s a collateralized debt obligation and you can cough up the collateral rather than the obligation at any time. So if your $500K home carrying your now $800K total mortgage is worth only $250K on the current market, then dump it and run. Better yet, dump it and stay put in it. The banking criminals that caused this mess may well not be able to evict you once you stop paying. In countless cases they bundled your debt into exotic financial instruments (derivatives) and your paperwork ended up in the hands of some sucker bank in Iceland or Lithuania or God knows where. If they can’t retrieve and produce that paper, they can’t generally run you out. In dealing with banks, just bear in mind that you should never feel any guilt about getting the better of them in any manner whatsoever (not including armed robbery because innocent tellers could get shot!). It’s not immoral to outsmart any other criminal enterprise, so why should it be any different for banks. The more you study banking, the more you inevitably must deem it to be criminal. If you manifest the exact same techniques, you go to jail for “counterfeiting”. WTF kind of nonsense is that? Banking is a faith-based initiative and nothing more. ---
**Author:** ![Candyman74](https://avatars.discourse-cdn.com/v4/letter/c/ad7895/32.png) [@Candyman74](https://boards.straightdope.com/u/Candyman74)\ **Post date:** [January 16, 2010, 7:34pm UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/73 "2010-01-16T19:34:52Z")
> [@Nobody](#): > > I guess intent counts for nothing then. Nope. It counts for nothing. Do you imagine for a second that a bank will not hold you to the letter of your contract? Why is it OK for them to do so to you, but not for you to do so to them? They’ve drafted a specific agreement. They’ve had it reviewed a million times by high paid lawyers. Everything in the agreement is there because they want it to be there. They’ll hold you to it, and if there are clauses which you can use to your advantage, you should feel free to do so. A bank isn’t a person. There isn’t any personal morality angle here. ---
**Author:** ![The\_Second\_Stone](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@The\_Second\_Stone](https://boards.straightdope.com/u/The_Second_Stone)\ **Post date:** [January 16, 2010, 8:19pm UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/74 "2010-01-16T20:19:16Z")
I’m skeptical of the reason that there is no morality in play isn’t because the bank isn’t human. Most of us would agree that it is immoral to rob a bank or defraud a bank (no violence involved there). Consider the pawn shop. You get a loan based on a treasure you give them as collateral. You decide that you are doing fine without the damn item and just forget about it. It’s not immoral, it’s a business transaction. Same with the bank. I think the distinction is that this is an eventuality that was planned for and agreed. ---
**Author:** ![MichaelQReilly](https://avatars.discourse-cdn.com/v4/letter/m/df705f/32.png) [@MichaelQReilly](https://boards.straightdope.com/u/MichaelQReilly)\ **Post date:** [January 16, 2010, 8:30pm UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/75 "2010-01-16T20:30:23Z")
> [@Ravenman](#): > > Has the OP ever quit a job for any reason other than being materially prevented from continuing to work there? > > Because a job contract is agreed upon by two parties, and if someone is able to work for the company, but chooses not to, then that person breaks the contract by quitting. There may be penalties for quitting, the most obvious being the that the employer won’t pay him any more. > > If we take this idea that it is immoral not to hold up one’s end of a contract even one minor step beyond the question of debt, then we plainly see that it leads to stupid conclusions like one could never morally quit one’s job for any reason other than physical disability. I understand the point you are trying to get at, but in the US jobs specifically aren’t contractual relationships in the absence of an agreement to the contrary. ---
**Author:** ![boytyperanma](https://avatars.discourse-cdn.com/v4/letter/b/4491bb/32.png) [@boytyperanma](https://boards.straightdope.com/u/boytyperanma)\ **Post date:** [January 16, 2010, 8:40pm UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/76 "2010-01-16T20:40:40Z")
They banks and the OP are attempting to force a social contract on the borrowers. The bank entered into an agreement one of the consequences of that contract is the borrower has the option of walking away. Banks have have a vested interest in capitalistic policies but they seem to be willing to make socialistic arguments when it serves their purpose. Currently the default of banks is to use the leverage of the social contract against their borrowers. If someone contacts a bank saying they can’t make their payments and want to negotiate the banks won’t. They refuse knowing most will continue to make payments to their own detriment in order to avoid defaulting. Banks will not even consider evaluating a loan until payments have been missed. If they were purely capitalist their interest would be in evaluating the merit of such a claim and adjusting to minimize loss on their part. ---
**Author:** ![Nobody](https://avatars.discourse-cdn.com/v4/letter/n/94ad74/32.png) [@Nobody](https://boards.straightdope.com/u/Nobody)\ **Post date:** [January 16, 2010, 10:14pm UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/77 "2010-01-16T22:14:10Z")
> [@boytyperanma](#): > > They banks and the OP are attempting to force a social contract on the borrowers. I’m not trying to force anybody to do anything. And I also don’t condone the banks refusing to renegotiate loans either. ---
**Author:** ![boytyperanma](https://avatars.discourse-cdn.com/v4/letter/b/4491bb/32.png) [@boytyperanma](https://boards.straightdope.com/u/boytyperanma)\ **Post date:** [January 16, 2010, 11:19pm UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/78 "2010-01-16T23:19:40Z")
> [@Nobody](#): > > I’m not trying to force anybody to do anything. And I also don’t condone the banks refusing to renegotiate loans either. Arguing people shouldn’t walk away from loans for moral reasons is an attempt to reinforce the social contract on borrowers. ---
**Author:** ![Candyman74](https://avatars.discourse-cdn.com/v4/letter/c/ad7895/32.png) [@Candyman74](https://boards.straightdope.com/u/Candyman74)\ **Post date:** [January 16, 2010, 11:25pm UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/79 "2010-01-16T23:25:49Z")
> [@The\_Second\_Stone](#): > > I’m skeptical of the reason that there is no morality in play isn’t because the bank isn’t human. Most of us would agree that it is immoral to rob a bank or defraud a bank (no violence involved there). Absolutely. We (as in society) have deemed that morally unacceptable and made it a crime, punishable by the state. We have also (as a society) _not_ made exercising a penalty clause in a contractual agreement a crime, because we (as a society) do not consider it comparable to robbing a bank. Therefore an argument which compares excercising a penalty clause in a contract to be the same as robbing a bank is, in my personal opinion, fairly weak. The two simply aren’t comparable; this is the rhetorical equivalent of Godwinning a thread. You are absolutely ethically sound when you excercise a clause in a contract which you and the bank have agreed on and signed. If it wasn’t part of the agreement, it wouldn’t be in the contract. ---
**Author:** ![Otara](https://avatars.discourse-cdn.com/v4/letter/o/a88e4f/32.png) [@Otara](https://boards.straightdope.com/u/Otara)\ **Post date:** [January 16, 2010, 11:33pm UTC](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047/80 "2010-01-16T23:33:37Z")
I guess for me putting the onus on the borrower means you are asking them to have more ability to foretell financial changes to the worth of the house than the banks making the loan. Given the vast difference in resources between the two parties, this seems a tad unfair. Otara [Previous page](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047.md?page=3) [Next page](https://boards.straightdope.com/t/if-you-think-its-ok-to-walk-out-on-a-mortgage-that-you-can-afford/525047.md?page=5)