Re: Loan modifications (was Re: Starting Engineer's Salaries)

On Thu, Oct 21, 2010 at 1:00 PM, Chris Frandsen <[email protected]> wrote:
>
> On Oct 21, 2010, at 2:02 PM, John Williams wrote:
>
>> But since you want to modify an agreement in your favor, you more or
>> less need to jump through their hoops, even if they are ridiculous.
>
> John, do you believe in negotiation/ old fashion bargaining?

Yes. I wrote "if you want to modfiy the agreement". I do not consider
stopping payments and leaving the house as modifying the agreement.

> Part of the initial contract, I am sure, was a very clear discussion
> of the grounds for foreclosure which go into effect when you decide
> not "to jump through their hoops". As it is part of the contract, I do
> not think it is dishonorable for one party or the other to cause the
> clause to be implemented.

Note that in many states, it is the law that mortgages are
nonrecourse, meaning that the lender cannot pursue the borrow to
recover the debt.

If I understand you, then you are saying that since the mortgage
specified what happens when the borrower defaults on repayment
(foreclosure), and since it is a nonrecourse loan, then it is okay for
the borrower to make a strategic default. Legally, of course, that is
true.

But morally, choosing to not repay the money is not okay. If I borrow
money, then I am giving my word that I will do everything within my
power to pay it back. It is that simple. It makes no difference
whether the agreement specifies what happens if I fail to keep my
word, I am still honor bound to try to keep my word. I may know that
the penalty for stealing a car is X years in jail, then if I steal a
car and serve my time, I have still done something dishonorable.