Walking away from your house/mortgage

I am not an expert on lending, but I believe you are very wrong. This does not fall under "business practices."

When you walk away from a mortgage, you are in breach of a contract. This gives the lender certain legal rights. I believe a lender has the right to take legal action against someone for the amount they owe on a mortgage, and can win judgment for legal fees, too. I know this, because walk aways became such an epidemic for Fannie Mae that that is exactly what they began doing earlier this year - suing people to recoup the outsanding mortgage debt from borrowers who strategically defaulted on loans (as is the case of the OP) in jurisdisctions that allow for deficiency judgments.

Also, walking away doesn't just wash your hands. I imagine you are still on the hook for property taxes and your local government can take legal action for failing to pay. They can also do so for abandoning and neglecting a home, even if it is not uniformly applied.

This is not simply a matter of two parties entering in some kind of non-legally binding caveat emptor agreement. When you default on a contract you are legally liable for your breach. That is certainly the case for a mortgage agreement.

 

No, you're not. When you violate a contract, you subject yourself to possible civil exposure. See my previous post about the legal actions Fannie Mae began bringing against people.

Also, your second post has nothing to do with your first post about banks doing things that laws prohibit them from doing. Lots of people and entities would do things that laws stop them from doing if the laws didn't exist. What was the point?

 

I never said anything about a moral obligation. Not sure where you got that from.

I said it is not, as you simply put it, a case of two business entities acting within the terms of an agreement.

Someone who walks away from a mortgage has breached an agreement.

As you pointed out yourself (and I am not an expert, so I have no clue about specific states), even in one of the "walkaway states," the bank can come after someone with assets if they walk away for those assets and the difference, if it is worth the time, effort and cost of legal fees to the bank.

You (or someone else) stated up top that this was somehow a two-way street. I will fight that myth every time its posted. The bank has lived up to its agreement. The person who defaults on their loan hasn't, and as is the law, can be subject to civil action, even if it isn't always applied because it isn't worth the bank's expense, or the person happens to live in a state that shields those without any assets left (not the case of the OP, by the way).

 

Once again, that is EVERYTHING in life.

I can shoplift a piece of candy. It's an option. I would do so with consequences that I can weigh for myself.

Or if you want it to be a civil kind of action, I can refuse to pay my landlord, if I rented. It's an option. I would do so with consequences that I can weigh for myself.

He, like the holder of your mortgage, DOES have recourse.

This isn't a simple two-way street business transaction without someone being in breach, as others have represented it. In this case, the bank has lived up to the terms of the mortgage agreement. The person who walks away has broken a contract. That DOES give the lender rights -- whether for practical reasons or not they exercise them. And as I pointed out in the case of Fannie Mae, the number of people with assets who were walking away got to be so epidemic (and the political pressure Fannie Mae was facing, so great) that they did begin a policy of going after those people with litigation.