Walking Away From A Home.

I’d noticed our neighbor carrying some rather large items, including most of his furniture, to the front yard. I thought he might be having interior work done, so I asked. He said he was moving to Ecuador in the next month.

Cool. Single guy, retired teacher, why not?

Out of interest, I asked what he would be doing with his house — sell or rent. He smiled and said he hadn’t figured that out yet. In fact, he was planning on just walking away from it.

Walking away — I didn’t know what he meant. So I asked him to repeat that. “Walk away. I’m going to move my stuff out and just walk. I’m upside down on the payments.”

I assumed the money he would get from the yard sale and the months he had not paid his mortgage would fund his travel to Ecuador.

What my neighbor had planned to do is called “ruthless default”. Many economists are now urging delinquent borrowers to consider this option rather than sticking it out through the long, stressful process of foreclosure. There are firms springing up which assist, for a fee, those considering voluntary default as a viable option.

This trend concerns me even more than the escalation of foreclosures in this country because of the message it sends homeowners.

The message is not just that the stress of the foreclosure process can be avoided by other means than simply seeking help and doing what one can to get on track with payments. The message is that there are no longterm national ramifications if those obligated to a mortgage payment decide to stop making payments and then just walk away.

This benign reasoning carries a destructive, non-American sympathy with it. I say “non-American” because we live in a great country which allows tremendous freedoms to those seeking gainful employment and a tract of land where they can cal home. Any message that encourages those who take this freedom for granted is “non-American”.

The most immediately gratifying part of our role in the industry is that, because of our focus on excellence, we are able to convey a safe, clean, well-maintained home to our client who will likely provide it at a more affordable rate to a family that could not have afforded it otherwise. But, we honestly hope to be put out of business due to a reverse trend in the market. Due to a more responsible approach to home purchase and construction lending.

There are now a wealth of options available to those approaching default. We hope to be on the ruthlessly giving end. Teaching people about responsible homeownership.


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