I think many of us have heard about the "jingle mail" phenomenon. That is nothing new -- it was around back in the 1980s too. The New York Times reported last week about the increasing number of homeowners who walk away from their houses and mortgages. Nothing new to us in the know either. Here's the surprising report: many of these (ex-)homeowners have "the capacity to pay, but have basically just decided not to". That statement was first publicly made in January 2008.
I understand their many reasons for doing such a thing. Desperate people do desperate things. But if they can yet will not, that doesn't exactly qualify as desperate, does it?
Judgment aside, let's look at the ramifications of such personal (ir)responsibility. When people default on their loans, the bank loses money. The following simplified logic then progresses:
Wall Street understands this. Mortgage brokers who advise people to walk away don't help the situation. Tell me, why should others pay for the mistake one makes? If you made a mistake in judgment, you reap the consequences (and vice versa). To quote one particular chief economist, "borrowers were not [all] victims." (italics mine)
Everything beneficial is permissible. Everything permissible is not necessarily beneficial. Just because I can eat mud doesn't mean it's good for me. (C'mon now folks, it also doesn't mean that I actually eat mud!) Use some common sense and have a backbone of ethics. You can't spend more than what you have in hand (or the bank account), nor should you spend all that you think you have.
I understand their many reasons for doing such a thing. Desperate people do desperate things. But if they can yet will not, that doesn't exactly qualify as desperate, does it?
Judgment aside, let's look at the ramifications of such personal (ir)responsibility. When people default on their loans, the bank loses money. The following simplified logic then progresses:
Lots of defaults = Bank loses lots of money.
Bank loses lots of money = bank fails.
Bank fails = bye-bye jobs + other businesses.
Bye-bye all this = community fails = country's economics eventually in the toilet
Bank loses lots of money = bank fails.
Bank fails = bye-bye jobs + other businesses.
Bye-bye all this = community fails = country's economics eventually in the toilet
Wall Street understands this. Mortgage brokers who advise people to walk away don't help the situation. Tell me, why should others pay for the mistake one makes? If you made a mistake in judgment, you reap the consequences (and vice versa). To quote one particular chief economist, "borrowers were not [all] victims." (italics mine)
Everything beneficial is permissible. Everything permissible is not necessarily beneficial. Just because I can eat mud doesn't mean it's good for me. (C'mon now folks, it also doesn't mean that I actually eat mud!) Use some common sense and have a backbone of ethics. You can't spend more than what you have in hand (or the bank account), nor should you spend all that you think you have.
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