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In this case, we are just choosing to execute one of the clauses in the contract, as any business has the right to do. So, there is nothing unethical about adhe

In this case, we are just choosing to execute one of the clauses in the contract, as any business has the right to do. So, there is nothing unethical about adhering to the contract. Agreed. The only thing I'm not fully on board with is staying in the house rent free for 12 months while waiting for the foreclosure process to complete. I can't quite explain why, but taking advantage of the slowness of the legal system seems different and less respectable than exercising the default option in the mortgage contract. There are concerns about short sales and foreclosures bringing down property values in the neighborhood. I wouldn't even worry about that. I've yet to hear any compelling explanation as to why high home prices are on balance a good thing. If car prices were to double because of a shortage of steel or something, we'd correctly realize that's a bad thing, even though everybody who owns a car would be richer on paper.

robrenaud 16y ago
I think we are in agreement about the morality. This is why I think it is wrong to live rent free in the house. It is acting in bad faith to sign a mortgage on a house knowing full well that you do not intend to pay back a cent and live in it for a year. On the other hand, maybe we could just label it strategic renting and blame the mortgage broker for signing the contract :P.
- dasil003 16y ago
  It is acting in bad faith to sign a mortgage on a house knowing full well... Wait, that's not what happened.
MichaelSalib 16y ago
The only thing I'm not fully on board with is staying in the house rent free for 12 months while waiting for the foreclosure process to complete. I can't quite explain why, but taking advantage of the slowness of the legal system seems different and less respectable than exercising the default option in the mortgage contract. I sympathize with your concerns, but one justification for staying rent free in the house is that it is a hedge against malicious bank activity. For example, in some cities, banks have initiated foreclosure proceedings against people who then dutifully move out, but the bank never takes possession of the property and never notifies the previous owners. As a result, ownership rebounds back to them, and they end up on the hook for tens of thousands of dollars of back taxes and fines. Make no mistake, if you abandon your home for a few years, you will eventually have to pay a lot of money. Now, if your bank was one of the banks that engaged in this behavior, you might be justified sitting in the home rent free: after all, you have no way of knowing if the bank is about to force you to incur costs that accrue by vacating the house. At least if you're sitting in the house, you can keep vagrants from moving in, perform basic maintenance like leak protection and do other things that will minimize the penalty you'll take if the bank ends up refusing to take ownership after initiating foreclosure.

robrenaud 16y ago

I think we are in agreement about the morality. This is why I think it is wrong to live rent free in the house. It is acting in bad faith to sign a mortgage on a house knowing full well that you do not intend to pay back a cent and live in it for a year. On the other hand, maybe we could just label it strategic renting and blame the mortgage broker for signing the contract :P.

dasil003 16y ago
It is acting in bad faith to sign a mortgage on a house knowing full well... Wait, that's not what happened.

MichaelSalib 16y ago

The only thing I'm not fully on board with is staying in the house rent free for 12 months while waiting for the foreclosure process to complete. I can't quite explain why, but taking advantage of the slowness of the legal system seems different and less respectable than exercising the default option in the mortgage contract. I sympathize with your concerns, but one justification for staying rent free in the house is that it is a hedge against malicious bank activity. For example, in some cities, banks have initiated foreclosure proceedings against people who then dutifully move out, but the bank never takes possession of the property and never notifies the previous owners. As a result, ownership rebounds back to them, and they end up on the hook for tens of thousands of dollars of back taxes and fines. Make no mistake, if you abandon your home for a few years, you will eventually have to pay a lot of money. Now, if your bank was one of the banks that engaged in this behavior, you might be justified sitting in the home rent free: after all, you have no way of knowing if the bank is about to force you to incur costs that accrue by vacating the house. At least if you're sitting in the house, you can keep vagrants from moving in, perform basic maintenance like leak protection and do other things that will minimize the penalty you'll take if the bank ends up refusing to take ownership after initiating foreclosure.