Costco Connection - December 2010

infoRMEDdebate
YES

from members: Albert Meier El Cajon, CA

When the banks have
allowed people to [get]
loans they cannot afford
and they are unwilling
to work with them, their
only option is to walk away.

Josette Finnegan Tampa, FL

Morally incorrect [but
people] ... could have
been misled by [a] bro-
ker or financial institu-
tion, therefore [making
it] necessary to walk away.

Is it ever OK to
walk away from
an “upside-down”
Clif Arrington
Kealakekua, HI

mortgage?

MEDIA BAKERY

NO

ThE housIng CollApsE has left millions of people owing more on their mortgages than their homes are worth. Consequently, some have decided to keep whatever money they have, walk away from the mortgage and lose their homes.

proponents say this can be a smart move. Businesses do it routinely. In today’s economic environment, foreclosure no longer reflects on the character of the borrower. And a mortgage contract imposes a penalty for nonpayment: surrender of the property. so borrowers aren’t escaping the consequences; they are suffering them.

Critics argue that walking away isn’t as easy as it might seem. It can ruin an owner’s credit score and still leave him or her financially vulnerable. Besides, they add, walking away from a mortgage sends the wrong message about being financially and socially responsible.

What do you think?

from members: Lori Johnson Cheltenham, MD

If you stay and tough
it out, there’s the pos-
sibility of the market
recovering. If you walk
away, you leave with
absolutely nothing ... except
ruined credit.

Joe Blume Chicago, IL

You have to take responsibility for what you agree to pay. A

contract is a contract.

find out more about this topic on the Web:

http://online.wsj.com/article/SB126100260600594531.html www.nytimes.com/2010/01/10/magazine/10FOB-wwln-t.html www.blackenterprise.com/magazine/2010/04/15/dont-walk-away/