As foreclosure rates continue to climb, it seems more and more folks are choosing to walk away from their homes and their mortgages. In some of these cases, folks are not necessarily walking away because they have to, i.e. though it may be difficult, they could continue to make the mortgage payments. They are walking away because they've lost so much equity they are underwater, sometimes significantly, with no hope of regaining the lost equity any time soon (next 10 years even).
So the question is: is this morally and/or ethically ok? We're not here to answer this question, because every situation is inherently unique, but to raise it as an issue to think about and discuss. While some may argue the answer is yes, we must also consider that the banking industry got so caught up in the hyper competitive lending frenzy that it created lending programs and underwriting guidelines that defied logic. Certainly they are as culpable as anyone.
Click on the title above for an interesting article discussing this issue.
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