Originally Posted by APToddlerMama
Back to CrunchyClark's statement "patently ridiculous." Sorry. None of your arguments make any sense, but if they make you feel better about your choices, I guess they're serving their purpose.
Bolded A... It isn't against the law to cheat on my husband, but it would be unethical. The law isn't about what is and isn't ethical.
Bolded B-- You didn't borrow money for from anyone for your blackberry. The contract you signed allowed you the "out" by paying the termination fee. Both you and the cell phone company agreed to the same terms. When you buy a house, you borrow REAL money that you agree to pay back. The cell phone reasoning is flawed. You could use than in a rent comparison with a broken lease clause but it makes no sense how you described.
Bolded C-- Really? Homeowners didn't get bailed out? Well plenty bailed themselves out by foreclosing. And who paid for that? Me and everyone else whose housing value tanked (and in my case we took an 80k hit) due to lots of unethical behavior on the parts of homeowners and banks. And of course some unfortunate people who lost their jobs, etc.
I have no more to add to this thread though. It is clear that there are plenty of people who will do whatever suits them and justify their behavior later on to make themselves feel warm and fuzzy. Sorry, but if it walks like a duck and quacks like a duck, its a duck. Those who have convinced themselves that walking away is okay despite having the means to pay are disillusioned.
Whoa! I don't know if you're here anymore, but I just wanted to say that you need to dig A LOT deeper if you think that you "lost" 80K of value in your home because of people walking away from their mortgages. The reason you lost that equity is because you bought/refinanced in a bubble, and now no one is willing to pay the inflated price for your home.
And when you get your free Blackberry, as in my cell phone example, you are borrowing the money from the cell phone company. You are agreeing to pay the bill for two years and they are spreading the cost of the phone out over that time. Why do you think they check your credit when you sign up for a cell phone contract? Why do you think they have pay-as-you-go plans for people with bad credit? If you do not pay and break your contract with the cell phone company, you are breaking a contract in the exact same way as walking away from your mortgage. If you decide not to pay the $200, the cell phone company then has the option of taking you to collections. If you don't pay your mortgage, your lender also has TONS of options. They can retain a judgement against you for up to 20 years in most states, they can sue you for all your assets, they can garnish your wages, etc. This is the recourse they have, and this is why contract law is not considered a moral issue. We no longer have debtors prison because each party in the contract has recourse. If you cheat on your husband, he can't just ask you to pony up $5000 and that will make him whole again.
Furthermore, this is also why lenders have the responsibility to investigate who they are lending to, and decide whether or not they are a good risk. As you may have noticed, they did a terrible job at that. They created ridiculous mortgage products that made no sense in the long term simply so they could quickly repackage them and sell them on the bond market. If I had billions of dollars to lend, and I did so irresponsibly, I wouldn't try to blame it on people who decided that they had no reason to continue to pay a mortgage for a home worth $100K less than the mortgage was for, who had put no money down. I would think, "Why on earth did I lend them that money?"
FWIW, I did not walk away from my mortgage. My dh and I put around $40k down and another $15K into repairs on a 30yr fixed mortgage, and then eight months later his industry almost completely disappeared from our area. After a year of scrambling every which way we could to make our mortgage, including paying for it with credit cards, we decided to short sell our house. We ended up selling it for almost exactly $200K less than we had bought it for, and it was one of the cheaper homes in the area when we bought.
Originally Posted by ChristyMarie
This argument doesn't really work.
In the cell phone example you are paying the agreed upon penalty to legally terminate the contract.
In the walking away from a mortgage example you are illegally breaking a contract without paying the agreed upon penalty and basically saying "sue me" which means the injured party needs to wait, pay legal fees and gamble on the court system to receive what is legally theirs.
Having to recently go through this because of someone breaking a legal contract I can say it is a horrible thing to do to someone. Yes, you can sue but that takes a lot of time, causes a lot of stress and costs a LOT of money. And people who break contracts ILLEGALLY realize what a pain it is to sue them. And what a bigger problem it can be to collect on any monies awarded by the courts.
I'm sorry someone broke a contract with you. It is definitely the risk you incur, however, when you decide to enter into a contract with someone.