Have you no morals?

I tweeted on Saturday about an article I read over at The Motley Fool. I am pretty frustrated with the article and think it is worthy content to bring up today. If nothing else, it should at least stir a little bit of controversy in the comment section below. You can find the full article here, but here’s a quick excerpt…

For many of the underwater homeowners in today’s market, paying down their mortgage isn’t really in their best financial interest. Particularly in states like Arizona — where mortgages are nonrecourse, meaning the lender can’t go after any of the homeowner’s assets other than the property itself — it makes little sense to continue paying a large mortgage on a devalued house when comparable rental rates are far below the monthly mortgage payment.

This article made my blood boil. Have you ever seen a ninja’s blood boil? It’s not a pretty sight. I totally disagree with hate this article for a few reasons…

First, and most important, it’s totally immoral. So you may be $100K underwater on your house. But if you can still afford the mortgage, you have every MORAL obligation to keep paying. To be clear, I don’t have an issue with someone walking away from their house if they have no ability to pay their mortgage (i.e. can’t put food on the table, can’t afford gas to get to work, have become unemployed, etc), but to recommend that people walk away, even when they can comfortably afford the mortgage is ludicrous. Sure it may not be illegal to walk away, but that doesn’t mean it’s the right thing to do. Just because your home decreased in value, doesn’t mean it’s acceptable to back out of your end of the contract. Remember, when you purchase a home, you VOLUNTARILY accept the risk that comes with it.

Quite a few people that commented on the article made comments like… “Banks screw us all the time, this is just our chance to get back at them.” Ummm excuse me? If you think that is an acceptable reason to back out of your mortgage contract than please do me a favor, quit reading my blog, and go read Im-A-Big-Dumb-Head.com. Now I’m not saying banks aren’t shady, ’cause we all know they can be, but why does that suddenly give you the right to be an equally douchtastic individual? This is such a juvenile thought-process, I can’t even comprehend why someone thinks this is a reasonable excuse. Yes banks can be evil, but you walking away from your home, makes you just as terrible.

The third and final reason I can’t stand this article is because it would cause the end of the world, okay maybe not the end of the world, but the entire economy would collapse if people actually followed this advice. A commenter said it best….

so let me get this straight…the plan is for people seriously underwater to just walk away…

…. followed by a further decline in home values……then those people who WERE just slightly underwater become seriously underwater….. but thats OK they can just walk away too…..

causing another wave of declining values….eventually even those that have equity will be underwater too….but thats OK they can just walk away with the rest of em……..

If people follow the author’s advice, the amount of foreclosures would skyrocket, thus causing a downward spiral in home values nationwide. An increase in foreclosures is NO BUENO in my opinion.

I have so many other things I want to say about this article, but instead of rambling on, I’d rather hear what you all have to say. Does anyone else find this article concerning? What do you think would happen if people actually started taking this advice? What matters more, your “best” financial interest, or your morals? Is there anyone out there that can try and make sense of how this could possibly be a good thing for America? Ugh, this article makes me depressed with humanity.