There was a great story about the Mortgage Crisis on 60 Minutes. While we have all heard the various issues explained about how much inventory is out there, how many people have been pushed out of their homes due to the ARMs resetting. But something struck me hard while watching the videos.
I have always felt bad for the people who lose their home. We nearly went through it as a kid and it was a horrible experience. There was real shame in being in a nice middle-class neighborhood and really not being able to afford it anymore. However, in the videos a couple were basically saying..."Whatever!"
In the "walking away" video, the couple admits that: they overpaid, they got a ARM knowing it would reset, and that they can pay the new payment after the increase...but they are going to let the house go and be repossessed. When asked by Steve Kroft, "Why?" They basically say that they aren't going to pay that kind of payment for that kind of house. Basically if the investment was working they would continue to pay, but now that is not...Oh well! They will go rent for a few years, get their FICO back up and give 'er a try again!
Maybe we are weird, or it is just the way we believe that you should act, but we would just never do that. If we lost, or gave up our house it would only be after every measure was taken. When we were going through trying to pay all of our medical bills and old debts, a bunch of people (including one of the ladies at the hospital) suggested to really consider bankruptcy, but we believed that we weren't disputing any of the charges, so we had the obligation to repay them.
Maybe some feel it is OK to some because 50% of this (or more) falls on the backs of the lenders giving loans to those with very little hope of paying them back. But for us integrity is blind. I am not saying that if you decide you must go bankrupt you are doing wrong, just that it should be a last, ditch effort. For us it is worth the effort and harm to our budget to try and pay our debts. No matter to whom.
So how about it? Are we just Luddites, and hopelessly out of step with the way the world works?