The New York Times ran a fascinating story yesterday about people walking away from their mortgage. (For background see our earlier posts here and here.) You can read the complete Times story here but I cannot resist a couple of quotes.
John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the ‘message’ they will send to ‘their family and their kids and their friends.’
The implication being that a home owner should not voluntarily walk away from a mortgage obligation, regardless of how “upsidedown” the homeowner may be with the mortgage and how fiscally stupid this may be for the family. Mr. Courson feels there is a moral obligation. Does this obligation apply to banks? I guess not for…
Businesses — in particular Wall Street banks — make such calculations routinely. Morgan Stanley recently decided to stop making payments on five San Francisco office buildings.
Or how about this from a former Secretary of the Treasury…
Former Treasury Secretary Henry M. Paulson Jr. declared that ‘any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator — and one who is not honoring his obligation.’ (Paulson presumably was not so censorious of speculation during his 32-year career at Goldman Sachs.)
What gets me is that these “authorities” think we are not very bright and have an extremely short memory. Oh well…
Don Grafues
Resource: The New York Times
Resource: The New York Times
