I’ve had this title “Loss of Honor, Walking Away From Your Mortgage” stored in draft mode for over a month. I hesitated in writing it because I was torn between how the government was treating us (practically giving money way to first time home buyers) and that fact that to walk away from your mortgage is wrong.
Why is it wrong you say?
Because you entered a contract with the other entity. A contract is a contract and without it, American isn’t quite the same place. What if your house lost 40% of it value, you might ask? Well, I think that bites, but you still have a contract with your lender. And the right thing to do would be to continue to make your payment as planned. Besides, there is a good chance that your house might get some of it’s value back. From recent readings, house prices are starting to appreciate a bit.
As you can tell, I’m up on the old soapbox about this voicing my opinion, but I kind of feel like a hypocrite! I now own my house outright, so I no long have a mortgage payment, but that’s not why I feel like a hypocrite!
You see a very close friend has just did exactly what I’m saying not to do… He bought a bigger, better house, and walked away from the mortgage on the other house. He didn’t tell me directly, but his dad was upset and let it leak out to me. Needless to say, I was shocked!
Such an action that my friend preformed is called a “Strategic Default“. This is where a person can still afford to pay a mortgage, but instead walks away.
My view of my friend has already changed for the worse, I find that I don’t want to hang out with him, and make up excuses as to why we can’t hang out.
I hope that Strategic Defaulters realize that doing such a deed, will tarnish their image, and they may even lose friends, or have their friendships reduced (like I did).
What would you do if a close friend or relative did such an action?
-MR
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