It's Okay To Walk Away: Let's End The "Morality" Double-Standard On Mortgage Defaults

An interesting article but the author totally fails to mention the crucial distinction in commercial mortgage financing between "recourse" and "non-recourse" lending. What he is describing holds true on 'non-recourse' lending and those loans are much more expensive, typically used on larger properties, and much harder to find relying almost exclusively on financing via capital markets (which have been virtually non-existent in the last three years).

Recourse financing which is more typical on commercial construction financing, smaller projects, and acquisition loans are more like home loans in that there is no limit to the banks' ability to come after all assets (including personal) and to obtain deficiency judgements against the individual in the event of a foreclosure.

A commercial property owner with recourse financing can't simply 'walk-away' without serious implications that could likely lead to bankruptcy and this is much more analagous to a home owner whose financing is also "recourse" meaning that the lender can file suit for a deficiency judgement if it so chooses or if it learns that the owner has other assets.

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Quit paying underwater mortgages and usurious credit card companies.
Instead, buy put options on SPY and call options on SLV.
Down with the banksters.

except that the lender is not really on the hook. we are, because our government has decided that no bondholders in Fannie and Freddie should lose their money, although no promise of such protection was ever given.

a dumb way to run a country

Great article! As extreme as this might be it will purge the system sooner of more of the "pending" defaults that have been "held" on the sidelines. Owning a home has been "sold" to the American people using deceptive business practices on the side of the government = (Wall Street) and the mortgage industry. They have taken care of their own now its time for the "little guy" to do the same -- it's the American way - everyman for himself -- (the system is beyond broken it is corrupt). If our leaders were calling for real investigations of the criminals that created, manipulated, and profited from the housing bubble I may feel differently but they are not, in fact they received a bail out -- did we? Google IMF and housing tax deduction -- the day may come in the near future when the government takes their advice and takes that away from us too! Banks/Gov have cruelly played around with people's lives -- how many have heard of "extend and pretend" ... walk, I say walk!

If you need a loan to buy it, you can't afford it.

You're totally wrong & obviously have NO idea what happens to the rest of the area by suggesting people do this. Here in MI where I'm a real estate we are seeing 1960 - 1970 prices in some areas. In my county overall 1990 - so if you bought your home 15 - 20 yrs ago you are underwater. Btw no matter what the press says a small % were job losses & we never saw price increases like other areas. When banks foreclose they market the home for much less than what's owed thereby forcing more underwater. The only way to stop the sinking ship is for everyone to stay still - folks this is very bad advise & will bankrupt this country.

oh also, I sure hope your son has applied for benefits with Social Security and any other Government Agency that can help him.

hy thanks for nice vedio

TO ALL: The ONLY thing you are OWED in life is for your mother and father to raise you right! Other than that, youre on your own and you reap what you sew! You get out of life what you put in to life! You should EARN and WORK for what you get rather than be a parasite to hard working taxpayers!