4 ms·
Your obligations are spelled out in the contract, and defaulting is (normally) a legitimate course of action. The bank and you made a mutually beneficial contr
by sagarm 16y ago
Your obligations are spelled out in the contract, and defaulting is (normally) a legitimate course of action.
The bank and you made a mutually beneficial contract: the bank loans you money, and in return you promise to give them back their money plus interest or your collateral. If you've elected to assign a moral value to one of your options, it can only hurt you.
I've never done this myself, so definitely make sure you know what you're getting into.
- petercooper 16y agoThat is not true in the UK (or much of the world). Indeed, people here are typically shocked to learn how flimsy US mortgages are, though I'm aware of abandonment as an option there (and I think it's totally crazy that they allow it - it's not at all beneficial for them to make a loss due to falling house prices). You can, of course, default but if they sell your property for less than the outstanding amount, you're still on the line for the difference and can be bankrupted over it. Hardly a moral choice when so much of your life can be disturbed over it. The "principle" I was referring to was not "not defaulting", btw, but not making a loss. I could sell, move, and take the loss, but I refuse, considering it'd put me in the tiny percentage of home owners who've ever made a loss. Sunk cost fallacy, sure, but I don't need to move yet, luckily.