Opinion Brief

'Force me out if you can': Homeowners vs. banks

More and more Americans are simply blowing off their mortgage payments. Are they just serving lenders their just desserts?

A growing number of homeowners — particularly those whose properties have plunged in value in recent years — are voluntarily ceasing payments on their mortgages and telling banks, "Force me out if you can," reports The New York Times. These loud-and-proud defaulters are using the money to stabilize their finances and even treat themselves to a few luxuries. Are these freeloaders taking advantage of overwhelmed banks, or did the banks deserve it for "snookering homeowners with loans that got them in over their heads"? (Watch an MSNBC report about homeowners "strategically defaulting" on their houses)

You can't walk away forever: Underwater homeowners may think it's a good idea to "milk the system" now, says Brad Tuttle in Time. But there are consequences to "squatting and lawyering up until somebody forces them out." Their credit score will become toxic, and lenders may come after them for full payment "years after the fact." And why not? Nobody forced them to take out an unaffordable loan.
"The 'free rent' approach"

The banks had it coming: Walking away isn't a "moral and ethical issue," despite all the "bleatings from the press," says Duncan "Atrios" Black at Eschaton. It's business. And for homeowners, "it's perfectly acceptable to make cold-hearted morality-free financial decisions when dealing with [banks] that are making cold-hearted morality-free financial decisions."
"On walking away"

This isn't a victimless crime: Well, "clearly, the banks’ Plan A — laying the world’s largest guilt trip on their borrowers — is falling apart," says Felix Salmon at Reuters. But unless they have a Plan B to deal with the glut of foreclosed houses, which they don't seem to, "the worst might be yet to come" in the mortgage crisis.
"Jingle mail and the mortgage crisis"

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