PRINT
EMAIL
COMMENT
BUZZ UP
DIGG THIS
The value of our family's home, bought at the peak of housing prices two years ago, has declined so much that we've lost all our equity, and it's now worth less than the mortgage. But the fixed-rate monthly payment hasn't changed, and we can comfortably afford it.
My husband says it would be smart to default on the loan, give the lender our house and buy a similar house for much less. "Everyone's doing it," he says. I think this is unethical. What do you think?
MORE MONEY & ETHICS | |||
 |
Should a Rich Kid Accept a College Scholarship? | ||
|
|
Failed CEOs Should Take Their Lumps | ||
|
|
Should Your Company Insure Your Spouse? | ||
I agree with you. Your mortgage agreement is a binding contract that you and your husband should honor, especially because you were not tricked by an unscrupulous mortgage broker (as many subprime borrowers were) and you can still afford your monthly payments. Surrendering a home in foreclosure should be the last resort for truly desperate homeowners.
Consider two other things: First, you won't easily get another mortgage if you walk out on this one. Second, the value of your home will eventually resume its ascent.
Politics in the workplace
Our industry has a political action committee that supports candidates who are hospitable to its interests. But I disagree with these politicians on many other issues. My boss is leaning on me and other executives to donate the maximum amount and I'm afraid to turn her down. What do you suggest?
It is unethical for your boss to pressure anyone to contribute to a PAC (or any other of her pet causes, for that matter). Try to put her off with a noncommittal response, such as "I'll give it close consideration," and if she persists, courteously explain your reservations. Or, you might consider making a token contribution to keep the peace.
In any event, tell your company's human-resources staff about the pressure, and they should make it clear to all that PAC donations are totally voluntary.
POSTED BY: W. Turnbull (May 01, 2009 06:57 AM)
Let's dig a little deeper. Many of the people having thier homes foreclosed bought a few years back with 0% down or 5% down. As the property appreciated they either refinanced or took 2nd loans, as though the house were a piggy bank. Where did that money go? If not into the house in improvements then they profited and either pocketed that money or in some way spent it. So, zero down and an equity loan. What did these people lose? Sounds like a net gain to me.
POSTED BY: rusunk (June 08, 2009 03:36 AM)
I think the heart of matter is more psychological than economical or ethical. There was a research study done on people's happiness vs income. The conclusion was that people's happiness wasn't necessarily tied to how much they made, but rather how much MORE they made compared to others. Isn't that the issue here? Yes I acknowledge there are many people who are caught in tough times and really struggle to make payments on their homes. But there is also a group of people who CAN still afford to pay, but just doesn't make sense to keep on doing that with their house underwater. When somebody purchased at the peak of the housing bubble, even with a fixed rate 30yr loan, probably is paying twice as much on monthly mortgage as someone who just recently purchased via a shortsale next door. Why not walk away, and save up to buy a bigger home in 3-5 years for same or less money, and result in less monthly payments? The real-estate value will not reach what it was 2-3 years ago by then....It has never been that high in 100yrs, and probably won't be in the next 10 yrs at the least. It would be foolish to think otherwise. You might ask if it's ethical to do so. I would ask is it ethical not to do so, to provide the best for your family moving forward? Think about it -- 30yrs of making high over-inflated monthly payments.
POSTED BY: Gijsihzk (June 27, 2009 11:36 AM)
vArwgx comment6 ,
Reprint Article
