[quote=patientrenter]I acknowledge that there are valid points to be made on both sides of this argument.
But I am ticked off by people pretending that there isn’t often a selfish motive when arguments are made that it’s OK to walk away from repaying your debts. Let’s face it, not many of us think of ourselves as investors who loaned large amounts of our own personal money to people overpaying for homes, and might lose a $1 of our own money for each $1 that’s not repaid. But lots of us are, or plan to be, homeowners. As homeowners, it would be nice if we could avoid repaying our mortgage, and feel no pangs of conscience or the pain of social opprobrium. We may never have done it, and we may not have an opportunity to do it now, but we wouldn’t mind having the option to do it in the future. “It’s OK if I steal a little, isn’t it”. My answer is No.[/quote]
Being selfish, by itself, is neither illegal nor unethical.
Recall that this discussion is about non-recourse loans, whose entire proceeds went to the purchase of the homes. No part of the money went to the borrowers.
What is it that is being stolen?
The borrowers are not holding any of the lender-provided money.
The lenders, who were given clear notice not to lend more than the house is actually worth, can take back the house at any time. The fact that the lenders have agreed to a deal that precludes them from doing so is nobody’s fault but their own.
The borrowers will ultimately be returned to their beginning positions, without homes and without loan proceeds, and will have lost any money that they put in along the way.
Any free rent benefit that the borrowers receive should be viewed in the same way as punitive damage awards – money that the law awards to parties who don’t “deserve” it, in order to penalize other parties who are responsible for harm caused by their intentional acts or negligence.
