Thursday, March 26, 2009

Am I Morally Responsible to Pay My Mortgage?

“Is it fair that your neighbor did everything wrong — he bought a house without a job — and the bank will help him, but the bank won’t talk to you until you’re three months behind?” Ballek says. “That’s just not fair.”

Ballek, who says he does not advise clients to default, finds it ironic that homeowners with the most conventional and conservative of all loans — 30-year fixed-rate mortgages — and were most committed to homeownership are now the ones who are considering foreclosure as an escape from their undervalued homes.

“At this point, they’d rather destroy their credit for seven years and start over again,” Ballek says.

“I don’t think the average person has a lot of remorse anymore. They just feel like a part of the crowd now.”

This Las Vegas Sun article is unusual for a newspaper, concentrating as it does on moral questions: Am I obligated to pay my bills? Must I honor contracts I've signed? Do I have a moral responsibility to make my mortgage payments if I'm able, even though my mortgage is greater than the value of the house? Are there circumstances when "right" is trumped by what's "pragmatic?"

It's an interesting and generally balanced piece using a lot of input from financial advisers. However, in a notable sign of our secular times, the reporter looks for the answers to moral questions first from two psychologists before turning to an evangelical pastor and a rabbi.