I’m just saying I believe that you should pay if you can afford to. We all have certain beliefs about things and stating them is not an attempt to force, or reinforce anything. If I knew anyone doing that I wouldn’t say a thing to them unless they asked my opinion.
And actually, the OP was narrowly focused on how most people here see taking the house back as just another option whereas I’m pretty certain that that wasn’t the intent.
But I know, who cares about the intent, it’s in there, it’s legal, screw the banks they’re evil, I’m being judgmental, etc… . I guess I’ll bow out because we’re all just repeating ourselves at this point.
Perhaps you are misunderstanding me and don’t understand the theory behind the ‘social contract’. It may be beneficial for you to understand these definitions for the purpose of your argument.
Don’t you have to make an intelligent business decision about your financial life. To continue paying a mortgage which is triple the worth of your home would be a waste of your families finances. If the bank refuses to refi what choice do you have? You can walk out, then buy a comparable house for 1/3rd the price. You would be stupid not to do it. Thats what your banker would do.
And yet, by letting the bank foreclose you trash your credit and if you’re able to get another bank to lend to you it will be at a very high rate. Funny, it’s almost as if the banks don’t trust you any more. And why? All you did was exercise an option that was in the contract. Strange that they hold it against you, since they gave you the choice in the first place.
You seem to believe that banks holding it against you means that it is wrong to do and not just, well, banks holding it against you for their own purposes.
In general banks are structured to be completely ethical neutral. They don’t base monetary decisions on how trustworthy you are. They base their numbers on historical data to predict an outcome.
A bank operating on those principals are not good or evil. They have nothing in common with those traits those are social concepts.
In my opinion, if they decide to take into account and use such social concepts as guilt and moral behavior to leverage it against customers to encourage payment they have stepped beyond their capitalistic purpose. At that point they are an ‘evil’ bank and well ‘screw those guys’
I took it to mean “financial self interest”. Banks don’t get hung up on fairness, or what makes borrowers happy, or what the borrower anticipated. They do what is in their financial self interest, within the terms of the loan.
Here’s another example: my credit card company has the right to raise my rate on existing balances at any time, for any reason. But when I signed the agreement, I assumed that if the rate was raised, it would be because I was late making payments, or my credit score fell, or the prime rate rose, or some concrete reason other than just because they can. So out of the blue, for no discernible reason, my rate goes up from 14.9% to 22.9%. Is that unethical? Is my banker a bad person because the reason for raising my rate isn’t what I anticipated, or it makes me unhappy? Of course not; it was right there in the contract, and I assumed the risk that they might do something that would well and truly fuck me over, just because they can, and it makes them a ton more cash.
So if my mortgage is suddenly upside down, and the financial calculus says I can walk away and save perhaps hundreds of thousands of dollars, why should I be considered a bad person just because I exercise an option that makes the bank unhappy? I honestly don’t see how you cannot understand that.
They’re not evil, just amoral. Repeat : amoral, not immoral. Morality does not apply to a bank’s actions towards you, and as far as I’m concerned the inverse is also true. Maths and accounting do not involve “good” or “evil”.
Your bank is not your dad, your priest, your dentist or Mr. Davidson your 6th grade math teacher. It doesn’t get to scold you for bad behaviour, or punish you beyond not making business with you on the same terms whether you’re a guy who doesn’t ever foreclose and might not be aware the option even exists, or you’re a guy who’s got financial insight.
Finally, re : the peril of anthropomorphizing organizations, I offer this insightful blog. Now, it’s 5 years old and written with brands and product-making corporations in mind, but I believe its subject matter is still current, and applies to banks just as well.
Yes, I know - I was correcting them, not you.
Or rather, I was correcting your insinuation that we were saying “banks are evil” (as opposed to amoral), while at the same time offering a counterpoint to posters such as **Defero **who did say all banks amounted to criminal entreprises (which would make them immoral, rather than evil. “Evil” is a stupid, childish word and concept, anyhow).
I disagree about whether banks can be evil. I think that they can be. They are corporations, congolmerations of human beings. If those human beings get together and use those corporations for acts that have good or evil intent and/or outcomes, it has moral character.
Consider various scenarios: a company that makes land mines or napalm or smart bombs or sniper rifles. Each type of weapon has a different capacity for collateral damage. A company that makes nuclear reactors and household appliances: each are made sloppily and with flaws or with great care. Does that not have impact?
How about banks and insurance companies that took money from European Jews before WWII and then refused to pay out?
How about Enron, a company that artificially gamed electricity prices?
These things were illegal, or had a direct effect on injury caused to people beyond what the law contemplated were the ordinary risks.