Quote:
Originally Posted by jyl
If the borrower fully repays a hugely upside-down mortgage, he effectively takes 100% of the loss and the bank takes 0% of the loss, even though both he and the bank screwed up.
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The rest of what you wrote is good food for thought. This above however dances along the lines of moral relativism. Nowhere in a mortgage does it state that one or both sides is exepected to take X% of loss if the SHTF. Consequences to both sides are pretty well known in advance. If things get so bad that those consequences become acceptable, then either party is free to take the steps that lead to those consequences. What's throwing a monkey wrench into the situation nowadays is the gov't. meddling and even the prospect of judges capriciously rewriting private party contracts. That kind of stuff has consequences for lots of folks who had nothing to do with the problem and it will make buying houses more difficult and expensive for all of us.