Website sells 'peace of mind' for walking away from mortgage

[Dinner]

Walking away from and investment is not the same thing as walking away from a debt.

It depends on the state. California is a no recourse state so, yes, any mortgage holder can hand the keys back to the bank at any time and have no further obligations to the bank. The bank literally has no legal recourse and must legally accept the keys in exchange for all outstanding debts or obligations. Given that banks almost never want to renegotiate mortgage debt (even with Obama's weak and timid incentives to do so) sometimes it is better for a borrower to do that then to face foreclosure. Hand it in and walk away; the loses become the bank's problem.

[Kidlicious]

mortgages aren't backed by honor. they're backed by a house.

As far as I know, people don't swear on their word that they're going to pay it back, they agree that if they don't pay it back they lose the house.

If banks don't lend more money than the house is worth, they'll be okay.

Bull. The loan is secured by collateral. That doesn't make it honorable to purposefully default on your loan.

[Kidlicious]

It depends on the state. California is a no recourse state so, yes, any mortgage holder can hand the keys back to the bank at any time and have no further obligations to the bank. The bank literally has no legal recourse.

I'm not talking about legal here. I'm talking about eithics.

[giblets]

Bull. The loan is secured by collateral. That doesn't make it honorable to purposefully default on your loan.

There's no reason why it would be unethical. The bank agrees to a contract. If you borrowed money from someone and promised that you would pay them back without the intention of ever repaying them, that would be unethical.

With a mortgage you back your debt with a house, so if you don't pay back you are in effect selling the bank a house, not taking advantage of someone's trust.

[Dinner]

mortgages aren't backed by honor. they're backed by a house.

As far as I know, people don't swear on their word that they're going to pay it back, they agree that if they don't pay it back they lose the house.

If banks don't lend more money than the house is worth, they'll be okay.

Again, it depends on the state. Crappy southern states often make borrowers liable for any outstanding loses the bank suffers even though the bank was speculating on the mortgage to begin with. In a recourse state (almost exclusively crappy southern states) if you hand in your keys the bank can still sue you for the outstanding balance; they can do the same if they foreclose on someone. Thankfully, civilized states don't **** consumers like this.

[Ming]

Ethics... Honor...
Show me a bank with either, and I might consider what you are saying.

[Dinner]

Bull. The loan is secured by collateral. That doesn't make it honorable to purposefully default on your loan.

There is no honor in finances. Finances are just usury so you should do what ever is in your best interests so if that means dumping the loses on the bank then so be it. It's just business.

[Kidlicious]

There's no reason why it would be unethical. The bank agrees to a contract. If you borrowed money from someone and promised that you would pay them back without the intention of ever repaying them, that would be unethical.

With a mortgage you back your debt with a house, so if you don't pay back you are in effect selling the bank a house, not taking advantage of someone's trust.

Wrong. The promise to repay the loan is not a promise to give up the collateral.

[Kidlicious]

@ Oerdin and Ming

So you two are no better than banks then?

[giblets]

Wrong. The promise to repay the loan is not a promise to give up the collateral.

A mortgage is basically the same as selling a bank your house on the condition that you can rent it, and buy it back.

It's just a contract. A business transaction. It's the bank's responsibility to avoid transactions that will hurt it. That's the way the system works and there's no reason why people who are more predisposed to behave ethically should be put at a disadvantage by a belief that it is unethical to walk away.

[Kidlicious]

Don't try to justify it.

[giblets]

Don't try to justify it.

Umm, why don't you stop trying to put people with ethical dispositions at a disadvantage?

[Kidlicious]

I don't believe that being ethical is a disadvantage, not for one personally, and not for society as a whole. You, on the other hand, are a drain on society, due to your lack of morality.

[giblets]

lol. You're the one who wants ethical people to get exploited by banks.

[Kidlicious]

lol. You're the one who wants ethical people to get exploited by banks.

Oh, so now paying back your loan is being exploited? Care to explain?