Comments on: IT’S OFFICIAL: Henry Blodget Says It’s Okay to Walk Away From Your Mortgage!

By: Joseph

Joseph — Fri, 29 Jan 2010 15:35:33 +0000

If business transactions were moral, there would be no contract required.

It is not the responsibility of the individual homeowner to prop up the economy for everyone else.

Perhaps forcing banks to write down the defaulted-on value of these homes is the only way to close the gap between the mortgages and the currently assessed value. A bailout for the individual homeowner, if you will.

If walking away from my mortgage meant more money in my pocket (long-term), I would do it, no question. I’m not going to suffer so banks can continue to take my money, tax money, and then strategically default on their own loans (see the recent strategic default on the Stuyvesant homes in NY).

By: BG

BG — Wed, 20 Jan 2010 19:34:02 +0000

#27 JLP) You should watch those shows (at least once). The both have guest interviews of surprisingly important people. The last show I watched had Stewart bashing on MSNBC for some blatant left-wing bias and inappropriate comparisons they were doing to Bush.

Granted both shows are left-wing leaning (what comedy show isn’t), they will both call a spade a spade. Personally, I like Colbert’s persona a little more — his style of comedy fits me better, but I do enjoy both.

I think they both do a good job of keeping the main-stream media (left or Fox) more honest.

By: JLP

JLP — Mon, 18 Jan 2010 21:43:08 +0000

I have never watched Colbert or Stewart. Are they equal-opportunity bashers or do they just pick on conservatives?

By: JT

JT — Mon, 18 Jan 2010 21:03:48 +0000

Yes, I love Colbert. His satire is beyond amazing.

By: Kirk Kinder

Kirk Kinder — Sun, 17 Jan 2010 18:09:23 +0000

Interesting bit on the Colbert Show that looks at this very issue. Amazing how insightful Colbert and Stewart are.

http://www.colbertnation.com/the-colbert-report-videos/261785/january-14-2010/the-word—honor-bound

By: Jim Kibler

Jim Kibler — Sat, 16 Jan 2010 14:15:12 +0000

A lot of people are walking away from their mortgages here in Florida but they do not need to do that if they will get their interest rate reduced like I did.

By: Andrew

Andrew — Sat, 16 Jan 2010 13:50:22 +0000

MS worked a short-sale. all parties agreed on the terms. Otherwise, the lender would have sued.

By: Kirk Kinder

Kirk Kinder — Sat, 16 Jan 2010 03:23:05 +0000

Recently Morgan Stanley walked away from commercial properties in San Fran because the values dropped to a point where MS felt it no longer made sense to pay. They had the ability to pay, but they chose not to. I didn’t hear anyone claiming that MS is immoral for this action (taking the egregious pay is another issue).

It was business. But, these banks somehow expect us to “act morally” when it comes to paying them back. These banks failed to follow any reasonable underwriting standards despite loaning up to 120% of the mortgage. They also hire their own appraiser, which they force the borrower to pay for, and they shame us when we decide that we would be better off renting a house next door or buying a new property.

A moral business decision is where both parties live up to the contract. With a mortgage, the contract states that if payment is not received then the bank takes the collateral (the house). If the homeowner tried to shirk payment and keep the house that is breaking the contract.

Also, based on some of the posts, I don’t see how not making a mortgage payment due to hardship isn’t immoral. If giving your word to pay the mortgage is the basis then even folks who lost their job and cannot afford to pay are immoral. They said they would pay their mortgage when they took it out, and now they are not. That is breaking the contract.

If you argue those circumstances void the morality argument, then at what point is it no longer immoral to walk away from a mortgage. What if the borrower lost the company 401(k) match and can still pay the mortgage with taxable income, but they won’t be able to save enough for retirement unless they have a smaller rent/mortgage payment. What if it is a small business owner who fears her business will suffer due to the downturn and decides that a lesser rent payment will allow her to build a safety net to keep her business going?

If we keep it to a contract law case, which it ultimately is, then we can avoid passing judgement on others.

By: JLP

JLP — Fri, 15 Jan 2010 23:35:34 +0000

nd wrote:

“Taking loan from bank for House is a Rational decision and not a moral decision.”

Maybe not, but choosing whether or not to PAY BACK THE LOAN is a moral decision.

By: nd

nd — Fri, 15 Jan 2010 22:46:50 +0000

I agree with Henry Blodget’s reasoning on why it is ok to walk away on a loan taken from a Bank. Taking loan from bank for House is a Rational decisional and not a moral decision. Banks are out there to maximize their profit (with no morality!!) so why customers should be stuck with morality in paying back loan. Let me give you an example… I am seller of Oil and purchased oil at $147 to sell to my customers. But prices went down very fast before I could sell all. Now does my old customers have a moral responsibility to buy oil from my at $147 when it is available at $100 at other seller? This is when they know that if they don’t buy from me, I will go bankrupt.

Please understand business taking loan from bank is business and not relationship.