DISQUS

Nannette Saunders · 4 months ago

Whether it be pay your mortgage or some other life decision we are struggle with what we should do occasionally. And it always comes down to what can I personally live with. I don't judge people based on decisions they make in their lives, I haven't walked in their shoes & everyone has their own breaking point. I have spoken with folks regularly about this exact same question and given similar answers. Many people are in the same boat.

justinmchood · 4 months ago

@Nannette,

Thanks for the comment - it seems that anyone who works in the RE field gets these questions and they are aware of how many different shades of grey there are. If you know how many different shades there are... it seems like it makes it a little easier not to judge.

Chris Butterworth · 4 months ago

I think we're all hearing about this frequently enough that it's almost cocktail party conversation. A couple of years ago it was easier to paint an ethical/moral/legal black & white picture; today things are different, with lots of shades of gray.

I've been tweaking a rough draft post of this exact topic the last couple of days, exploring the shades of gray.. (you just earned a linkback for beating me to it! ;-)

good job - thought provoking..

justinmchood · 4 months ago

@Chris,

You are right - the cocktail conversations 4 years ago were all about Real Estate -- and how much equity everyone had recently "found".

Now those cocktail conversations are still all about Real Estate -- but it has shifted to a mix of horror stories, can-you-believe-they-did-that stories with an occasional judgment tossed in for good measure.

To quote my 83 year old Grandfather "if you live long enough, you will see everything".

I am starting to think he might be right.

datadude · 4 months ago

Make the right decision for you not based on others views. Most of the shame propaganda out there is put out there by the people left holding the bag.

* Is it legal?
Yes, not paying the contract is legal as long as the turns over the property as stated in the contract.
* Is there anything I can do to appease all parties involved?
This again is stated in the contract, the lender is appeased to take back the property upon non payment.
* What does my spouse think?
Hopefully he/she is thinking about what is best for their families. A short hit to their credit is far better than a long term debt slave!
* Is it against my religious beliefs?
This has little to do with a legal contract. The two parties have already made what is an acceptable decision between the two if the contract is not met. The lender will take the property back if the payment is not made.
* If my choice became public information would I be embarrassed by it?
I would be more embarrassed that I was taken on a raw deal and know that I wasn't making the right decision for self and family preservation and become a lifelong debt slave.

This is being discussed many places and I certainly would limit you views or questions to someone who is in the industry people!

Is it immoral for calpers to be walking away from a contract on a building? No it is a contract and there are provisions within it to take care of such decisions.
http://online.wsj.com/article/SB125063903854941...

No it isn't is is a business decision on what is best for it's finances just as people should make what is the best decision for theirs. Granted you should have made that up front but you have a second choice because of the contract.

other references/posts:

http://globaleconomicanalysis.blogspot.com/2009...

http://globaleconomicanalysis.blogspot.com/2009...

http://globaleconomicanalysis.blogspot.com/2009...

justinmchood · 4 months ago

@datadude,

Thanks for sharing the insight - the Calpers story was interesting!

I agree with your thought that if you are a person who gets into a shade of gray, you should probably limit your questions to someone who is in the industry - otherwise you are really just asking for more opinions and not facts.

Too many opinions from people who aren't "qualified" can really only probably confuse someone.

C Richey · 4 months ago

Nanette has a point. You can't judge someone until you've been in there exact position. Today everyone seems to have to make tough choices. I know we've had to in the past year and I'm sure we'll need to this year as well.

gar62 · 4 months ago

I'm the guy who sent the original email and reply. Yes, breaking the contract is legal, but there's a voice going off in my head saying "when people do that it just adds to the economic problems". If I break the contract or short sale, I will have a hard time qualifying for a mortgage for a while, yes? It's not that I can short sale then be all happy and go buy a new house immediately, is it? Looking at some numbers, payments on an unsecured 15 year loan at 5.5% for $50,000 would be about $400/month. New house I could buy to replace current house would be about $100k less than what I owe now, so overall payments would be about the same. A debt slave indeed, but I already am one. Thanks for the conversation.

justinmchood · 4 months ago

@ C Richey,

For better or worse, I am constantly reminded that under no circumstances am I qualified to judge what someone should do. Someone else may be qualified, but I am not that person. Thanks for commenting.

@Gar62,

Thanks for stopping by! It would alarm you how many times I have conversations with people in similar situations. If I was smart, I would collect the "what happened" story of what each person did in their individual situations and then write a book!

Feel free to keep us posted on what you ended up doing if you want - your story might be able to help another person who finds that they are in a very similar - or exact - situation as you were in once.

Good luck!

Justin

linseyplaneta · 3 months ago

To me, this just underscores how incredibly sad and serious this has become. There are so many people that in no other climate would be asking themselves this. This is someone that is clearly not cavalier when then say, "I signed when taking out the mortgage, saying I would pay this back...sticking to my commitments I would avoid the evil of falling behind on payments (which I understand is necessary to do a short sale) and the calls and harassment of people wanting the money I owe them."

Clearly, this is someone that is not easily shirking responsibility. These are the moments I cringe a bit. Great post.

As for this owner, at the end of the day, you do the best you can. It all works out. It always does; not always how we necessarily envision it. Best of luck to you and you are not alone.

buyingahome · 2 months ago

Thanks for sharing the insight. I'm like your articles