[analyst]

[quote=kev374]walking away from your home when you can afford it is VERY UNETHICAL, but only because the taxpayers are now bailing out the banks because of it.

IF taxpayers were not involved in any way and the system was 100% freemarket, i.e. banks would take losses and shut down then I see absolutely no problem with walking away…it is between the borrower and the bank.

But because of the bailouts this is affecting everyone now so yes it is unethical.[/quote]

Again, with or without the bailouts, it is not between the borrower and the lender, because the lawmakers, decades in the past, intentionally enacted a protection for the owner-occupant-borrower. The lawmakers anticipated the real danger of the borrower being convinced to overpay by the concerted action of lenders and the real estate sales force, and pre-specified that the owner-occupant-borrower could obtain relief from the artificially inflated price. Real problem, appropriate relief.

The owner-occupant-borrower is not responsible for the actions of federal officials, which actions are considered to be helpful by some and damaging by others. As a person who pays much more in federal taxes than should be required to fund an appropriately restrained federal government, I am not happy about the risk to taxpayers flowing from current federal government actions.

However, it should be clear to people who spend more than a few minutes studying the current challenges that federal funds flowing to financial companies is more for the rescue of the ultimate investors on the other side of those financial companies than it is for the rescue of the financial companies themselves. These ultimate investors include:
individuals directly
individual retirement accounts
union retirement funds
corporate retirement funds
insurance companies (investing premium revenue)
state governments
county governments
city governments
school districts
foreign governments

This is not to say that the financial companies do not receive some undeserved benefit. They do. It is unfortunately unavoidable that they receive such undeserved benefit from the act of rescuing the intended beneficiaries.

Some will ask why the federal funds do not flow directly to the ultimate intended beneficiaries, bypassing the intermediary financial companies. It is because the records, resources, and human knowledge necessary to enable the flow of funds to the ultimate intended beneficiaries will not remain in place if the intermediary financial companies are designated for liquidation.

[analyst]

[quote=kev374]walking away from your home when you can afford it is VERY UNETHICAL, but only because the taxpayers are now bailing out the banks because of it.

IF taxpayers were not involved in any way and the system was 100% freemarket, i.e. banks would take losses and shut down then I see absolutely no problem with walking away…it is between the borrower and the bank.

But because of the bailouts this is affecting everyone now so yes it is unethical.[/quote]

Again, with or without the bailouts, it is not between the borrower and the lender, because the lawmakers, decades in the past, intentionally enacted a protection for the owner-occupant-borrower. The lawmakers anticipated the real danger of the borrower being convinced to overpay by the concerted action of lenders and the real estate sales force, and pre-specified that the owner-occupant-borrower could obtain relief from the artificially inflated price. Real problem, appropriate relief.

The owner-occupant-borrower is not responsible for the actions of federal officials, which actions are considered to be helpful by some and damaging by others. As a person who pays much more in federal taxes than should be required to fund an appropriately restrained federal government, I am not happy about the risk to taxpayers flowing from current federal government actions.

However, it should be clear to people who spend more than a few minutes studying the current challenges that federal funds flowing to financial companies is more for the rescue of the ultimate investors on the other side of those financial companies than it is for the rescue of the financial companies themselves. These ultimate investors include:
individuals directly
individual retirement accounts
union retirement funds
corporate retirement funds
insurance companies (investing premium revenue)
state governments
county governments
city governments
school districts
foreign governments

This is not to say that the financial companies do not receive some undeserved benefit. They do. It is unfortunately unavoidable that they receive such undeserved benefit from the act of rescuing the intended beneficiaries.

Some will ask why the federal funds do not flow directly to the ultimate intended beneficiaries, bypassing the intermediary financial companies. It is because the records, resources, and human knowledge necessary to enable the flow of funds to the ultimate intended beneficiaries will not remain in place if the intermediary financial companies are designated for liquidation.

[analyst]

[quote=kev374]walking away from your home when you can afford it is VERY UNETHICAL, but only because the taxpayers are now bailing out the banks because of it.

IF taxpayers were not involved in any way and the system was 100% freemarket, i.e. banks would take losses and shut down then I see absolutely no problem with walking away…it is between the borrower and the bank.

But because of the bailouts this is affecting everyone now so yes it is unethical.[/quote]

Again, with or without the bailouts, it is not between the borrower and the lender, because the lawmakers, decades in the past, intentionally enacted a protection for the owner-occupant-borrower. The lawmakers anticipated the real danger of the borrower being convinced to overpay by the concerted action of lenders and the real estate sales force, and pre-specified that the owner-occupant-borrower could obtain relief from the artificially inflated price. Real problem, appropriate relief.

The owner-occupant-borrower is not responsible for the actions of federal officials, which actions are considered to be helpful by some and damaging by others. As a person who pays much more in federal taxes than should be required to fund an appropriately restrained federal government, I am not happy about the risk to taxpayers flowing from current federal government actions.

However, it should be clear to people who spend more than a few minutes studying the current challenges that federal funds flowing to financial companies is more for the rescue of the ultimate investors on the other side of those financial companies than it is for the rescue of the financial companies themselves. These ultimate investors include:
individuals directly
individual retirement accounts
union retirement funds
corporate retirement funds
insurance companies (investing premium revenue)
state governments
county governments
city governments
school districts
foreign governments

This is not to say that the financial companies do not receive some undeserved benefit. They do. It is unfortunately unavoidable that they receive such undeserved benefit from the act of rescuing the intended beneficiaries.

Some will ask why the federal funds do not flow directly to the ultimate intended beneficiaries, bypassing the intermediary financial companies. It is because the records, resources, and human knowledge necessary to enable the flow of funds to the ultimate intended beneficiaries will not remain in place if the intermediary financial companies are designated for liquidation.

[analyst]

[quote=kev374]walking away from your home when you can afford it is VERY UNETHICAL, but only because the taxpayers are now bailing out the banks because of it.

IF taxpayers were not involved in any way and the system was 100% freemarket, i.e. banks would take losses and shut down then I see absolutely no problem with walking away…it is between the borrower and the bank.

But because of the bailouts this is affecting everyone now so yes it is unethical.[/quote]

Again, with or without the bailouts, it is not between the borrower and the lender, because the lawmakers, decades in the past, intentionally enacted a protection for the owner-occupant-borrower. The lawmakers anticipated the real danger of the borrower being convinced to overpay by the concerted action of lenders and the real estate sales force, and pre-specified that the owner-occupant-borrower could obtain relief from the artificially inflated price. Real problem, appropriate relief.

The owner-occupant-borrower is not responsible for the actions of federal officials, which actions are considered to be helpful by some and damaging by others. As a person who pays much more in federal taxes than should be required to fund an appropriately restrained federal government, I am not happy about the risk to taxpayers flowing from current federal government actions.

However, it should be clear to people who spend more than a few minutes studying the current challenges that federal funds flowing to financial companies is more for the rescue of the ultimate investors on the other side of those financial companies than it is for the rescue of the financial companies themselves. These ultimate investors include:
individuals directly
individual retirement accounts
union retirement funds
corporate retirement funds
insurance companies (investing premium revenue)
state governments
county governments
city governments
school districts
foreign governments

This is not to say that the financial companies do not receive some undeserved benefit. They do. It is unfortunately unavoidable that they receive such undeserved benefit from the act of rescuing the intended beneficiaries.

Some will ask why the federal funds do not flow directly to the ultimate intended beneficiaries, bypassing the intermediary financial companies. It is because the records, resources, and human knowledge necessary to enable the flow of funds to the ultimate intended beneficiaries will not remain in place if the intermediary financial companies are designated for liquidation.

[analyst]

[quote=kev374]walking away from your home when you can afford it is VERY UNETHICAL, but only because the taxpayers are now bailing out the banks because of it.

IF taxpayers were not involved in any way and the system was 100% freemarket, i.e. banks would take losses and shut down then I see absolutely no problem with walking away…it is between the borrower and the bank.

But because of the bailouts this is affecting everyone now so yes it is unethical.[/quote]

Again, with or without the bailouts, it is not between the borrower and the lender, because the lawmakers, decades in the past, intentionally enacted a protection for the owner-occupant-borrower. The lawmakers anticipated the real danger of the borrower being convinced to overpay by the concerted action of lenders and the real estate sales force, and pre-specified that the owner-occupant-borrower could obtain relief from the artificially inflated price. Real problem, appropriate relief.

The owner-occupant-borrower is not responsible for the actions of federal officials, which actions are considered to be helpful by some and damaging by others. As a person who pays much more in federal taxes than should be required to fund an appropriately restrained federal government, I am not happy about the risk to taxpayers flowing from current federal government actions.

However, it should be clear to people who spend more than a few minutes studying the current challenges that federal funds flowing to financial companies is more for the rescue of the ultimate investors on the other side of those financial companies than it is for the rescue of the financial companies themselves. These ultimate investors include:
individuals directly
individual retirement accounts
union retirement funds
corporate retirement funds
insurance companies (investing premium revenue)
state governments
county governments
city governments
school districts
foreign governments

This is not to say that the financial companies do not receive some undeserved benefit. They do. It is unfortunately unavoidable that they receive such undeserved benefit from the act of rescuing the intended beneficiaries.

Some will ask why the federal funds do not flow directly to the ultimate intended beneficiaries, bypassing the intermediary financial companies. It is because the records, resources, and human knowledge necessary to enable the flow of funds to the ultimate intended beneficiaries will not remain in place if the intermediary financial companies are designated for liquidation.

[analyst]

[quote=UCGal]

I would argue that to stop paying while continuing to live in the home is unethical. It’s trying to play both sides. Breaking the contract but still reaping the benefits (occupation of the house.)

I believe that there is plenty of blame and pain to share among the parties to the contract – borrower loses downpayment and takes credit hit. Lender takes hit to investment and has costs associated with reselling the property. But if the person doesn’t vacate and chooses to not pay – in some ways, that’s theft. It’s kind of like “dining and dashing”. They are reaping the benefits without the costs.[/quote]

The only reason that the lender cannot quickly and effectively close out the situation with a foreclosure sale is because that lender had previously participated (along with the real estate sales force) in convincing the owner-occupant-borrower to overpay for the home.

When people receive punitive damages in court cases, it is not because they “deserve” them. And the fact that they accept them does not make them unethical.

The purpose of the punitive damages concept is to exact a substantial penalty from the party allowing harm to occur, so that they will try seriously not to let it happen again. That is also the purpose of “non-recourse” laws.

In the short run, certain parties receive benefits they may not truly deserve. In the long run, other parties are (hopefully) convinced to refrain from inappropriate activities, to the benefit of the larger community.

[analyst]

[quote=UCGal]

I would argue that to stop paying while continuing to live in the home is unethical. It’s trying to play both sides. Breaking the contract but still reaping the benefits (occupation of the house.)

I believe that there is plenty of blame and pain to share among the parties to the contract – borrower loses downpayment and takes credit hit. Lender takes hit to investment and has costs associated with reselling the property. But if the person doesn’t vacate and chooses to not pay – in some ways, that’s theft. It’s kind of like “dining and dashing”. They are reaping the benefits without the costs.[/quote]

The only reason that the lender cannot quickly and effectively close out the situation with a foreclosure sale is because that lender had previously participated (along with the real estate sales force) in convincing the owner-occupant-borrower to overpay for the home.

When people receive punitive damages in court cases, it is not because they “deserve” them. And the fact that they accept them does not make them unethical.

The purpose of the punitive damages concept is to exact a substantial penalty from the party allowing harm to occur, so that they will try seriously not to let it happen again. That is also the purpose of “non-recourse” laws.

In the short run, certain parties receive benefits they may not truly deserve. In the long run, other parties are (hopefully) convinced to refrain from inappropriate activities, to the benefit of the larger community.

[analyst]

[quote=UCGal]

I would argue that to stop paying while continuing to live in the home is unethical. It’s trying to play both sides. Breaking the contract but still reaping the benefits (occupation of the house.)

I believe that there is plenty of blame and pain to share among the parties to the contract – borrower loses downpayment and takes credit hit. Lender takes hit to investment and has costs associated with reselling the property. But if the person doesn’t vacate and chooses to not pay – in some ways, that’s theft. It’s kind of like “dining and dashing”. They are reaping the benefits without the costs.[/quote]

The only reason that the lender cannot quickly and effectively close out the situation with a foreclosure sale is because that lender had previously participated (along with the real estate sales force) in convincing the owner-occupant-borrower to overpay for the home.

When people receive punitive damages in court cases, it is not because they “deserve” them. And the fact that they accept them does not make them unethical.

The purpose of the punitive damages concept is to exact a substantial penalty from the party allowing harm to occur, so that they will try seriously not to let it happen again. That is also the purpose of “non-recourse” laws.

In the short run, certain parties receive benefits they may not truly deserve. In the long run, other parties are (hopefully) convinced to refrain from inappropriate activities, to the benefit of the larger community.

[analyst]

[quote=UCGal]

I would argue that to stop paying while continuing to live in the home is unethical. It’s trying to play both sides. Breaking the contract but still reaping the benefits (occupation of the house.)

I believe that there is plenty of blame and pain to share among the parties to the contract – borrower loses downpayment and takes credit hit. Lender takes hit to investment and has costs associated with reselling the property. But if the person doesn’t vacate and chooses to not pay – in some ways, that’s theft. It’s kind of like “dining and dashing”. They are reaping the benefits without the costs.[/quote]

The only reason that the lender cannot quickly and effectively close out the situation with a foreclosure sale is because that lender had previously participated (along with the real estate sales force) in convincing the owner-occupant-borrower to overpay for the home.

When people receive punitive damages in court cases, it is not because they “deserve” them. And the fact that they accept them does not make them unethical.

The purpose of the punitive damages concept is to exact a substantial penalty from the party allowing harm to occur, so that they will try seriously not to let it happen again. That is also the purpose of “non-recourse” laws.

In the short run, certain parties receive benefits they may not truly deserve. In the long run, other parties are (hopefully) convinced to refrain from inappropriate activities, to the benefit of the larger community.

[analyst]

[quote=UCGal]

I would argue that to stop paying while continuing to live in the home is unethical. It’s trying to play both sides. Breaking the contract but still reaping the benefits (occupation of the house.)

I believe that there is plenty of blame and pain to share among the parties to the contract – borrower loses downpayment and takes credit hit. Lender takes hit to investment and has costs associated with reselling the property. But if the person doesn’t vacate and chooses to not pay – in some ways, that’s theft. It’s kind of like “dining and dashing”. They are reaping the benefits without the costs.[/quote]

The only reason that the lender cannot quickly and effectively close out the situation with a foreclosure sale is because that lender had previously participated (along with the real estate sales force) in convincing the owner-occupant-borrower to overpay for the home.

When people receive punitive damages in court cases, it is not because they “deserve” them. And the fact that they accept them does not make them unethical.

The purpose of the punitive damages concept is to exact a substantial penalty from the party allowing harm to occur, so that they will try seriously not to let it happen again. That is also the purpose of “non-recourse” laws.

In the short run, certain parties receive benefits they may not truly deserve. In the long run, other parties are (hopefully) convinced to refrain from inappropriate activities, to the benefit of the larger community.

[analyst]

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