Mortgage Crisis Ethics

We face a very real possibility of having our mortgage foreclosed. Some have told us it is unethical and immoral for us to default on our loan. However, we (nor the 7 million other homeowners who face foreclosure) didn’t cause this crisis.  It was the corrupt, greedy, and shady business practices of the big lenders who created this – along with the lack of oversight by our regulators.  Not only did they sell loans to people who couldn’t afford them, engage in predatory lending practices, but they bet against those loans – knowing they would make more money if the loans failed.

http://www.ustream.tv/flash/video/7515741

It isn’t right to expect the common homeowners to bear the brunt of this crisis. Granted, not all seven million homeowners who face foreclosure did the right thing, engaged in ethical behavior, or made correct choices. But don’t tell me I’m immoral for defaulting.

In the last three years, we have lost over $100,000 in equity.

We didn’t buy too much house. We don’t live a life of debt.  Both our cars are paid off.  We had 3-4 months salary saved – in addition to long-term savings.  It was a perfect storm of the worst recession since 1929, an unexpected job loss, the bursting of the housing bubble, and corrupt lenders.  Now, with the surviving lenders making record profits, and paying out millions of dollars in executive bonuses, people are telling me that I”m immoral for defaulting on my loan.

I don’t think so…

If we had gone into this expecting to default, that would be another story – but we entered into this secured mortgage, expecting to stay with the house for awhile.  But the rug got pulled out from underneath us.

If you want to point fingers, point them at the lenders who made shady deals and then bet on failure.  Hold their feet to the fire – not mine.

Oh, by the way, I’ve created a Facebook page here, for people to share their collective wisdom on navigating the foreclosure minefield.