fter showing signs of recovery, the real estate market appears to be stalling again. Prices have plunged so far in the last three years that by June 5. 1 million Americans will have homes worth less than 75 percent of what they owe on the mortgage. Given the math, as many as 1 million people last year made strategic decisions simply to stop making mortgage payments and walk away. Is that immoral? (Watch a discussion of the morality of ditching mortgages)
Yes, it's wrong: "From an ethical standpoint, this is really rotten," says Rick Moran in The Moderate Voice. "By walking away, these homeowners are making it more difficult for the rest of us to get a home loan or refinance our existing home." That's "selfish."
"The ethics of 'walking away' from your mortgage"
Banks leave people with no choice: The banks' "snake-oil ways" helped create this mess, says Scott Jagow in Marketplace. "If we’re talking morality on the homeowner side, how about the banks?" Lenders could help people stay afloat by reducing their mortgage principal -- by refusing, "they're only encouraging more of their borrowers to take a hike."
"It's the principal of the thing"
It might be good for everybody: "For better or worse," walkaways are so common that the "stigma associated with foreclosure is fading," says Melinda Fulmer in MSN.com. The payoff is undeniable -- strategic defaulters can rent similar homes for hundreds less than they were paying on their mortgage. And economists say this serves as "stealth stimulus," because these people spend the extra cash and boost the economy.
"Should you feel guilty if you walk away?"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- The world's dumbest idea: Taxing solar energy
- Why would a young person today be religious?
- Why atheism doesn't have the upper hand over religion
- He said he was leaving. She ignored him.
- 31 TV shows to watch in 2014
- Which states get screwed worst by the Electoral College?
- Why Good Friday is so important to Christians
- 10 things you need to know today: April 18, 2014
- Israel and Russia are getting along. Have the neocons noticed?
- Why I'm a pro-life liberal
Subscribe to the Week