Strategic Default

Yesterday while surfing the net I watched a 60 minute segment on the housing crisis. Yada, Yada, Yada...what else is new.  We know it is here, we had is shoved down our collective throats and we are working hard to keep moving forward and bring the rest of the nation with us...and then "Strategic Default."

Strategic Default is the latest trend and may drag us down even further.  It is a tool used by an individual for his own benefit and it is a tool that has no morality.  One out of 5 defaults is a "strategic default."  That is where a person defaults on his/her loan, even though they can afford the mortgage payment.  They just don't want to pay because their house is underwater...that is, the current value is less than owed on the mortgage.  This strategy has so many pitfalls both economically and morally.  Suddenly people are deciding even though they entered into a binding contract with the bank to payback their loan and they can afford the monthly payment, have decided to not pay.  Collectively, can they not see beyond their own front door what this will do to the nation? 

It is beyond my understanding how a person can suddenly adjust their moral compass.  Now, so many have had to default  for actual reasons, that default and bankruptsy is not a shameful word that is hidden from your family and friends but, it illicts sympathy.  It is not unusual to know several people who are suffering through this...and because of this it allows formally moral people to default on their loans who can "afford" their loans, they just don't want to pay anymore!  Just because you bought a house at the height of the market and it is not worth as much is not a reason to default if you can afford the payment.  The argument is the banks have done the same move...but collective they are a small population and as I know we have all taught our children...just because Johnny does it, doesn't mean you can do it.

It seems that suddenly people are justifying their immorality...because the nation is in trouble.  Just because you enjoyed that wonderful hot tub, that spendy vacation, new cars on the equity of your home...now that you feel you have been screwed by the global market you can say, screw you to the bank?  Whaaaaa, suck it up.

It takes me back to the death of my mother in law.  She loved her son and she loved her grandsons.  She was a generous woman who unscrupulous individuals took advantage of...so when she passed she had an outstanding balance on a credit card from a computer she purchased for a jerk.  She had enough money left in the bank to pay it off...but, we were told that we could keep the money and not pay off her debt.  That because she died her debt died with her.  Were we going to do that?  Absolutely not!  For the price of a computer were we going to compromise our moral integrity and color the memory of her with this immoral choice? Who you are, shows up in your choices.  You cannot not say I am a law abiding citizen and then go rob a bank because everyone else is doing it...I am who I am even when no one is watching me or knows what I am doing.