A Mortgage vs The Rule of Law

When you buy your home it is essentially a form of investment as you are expecting the value of it to be higher when you sell it. The mortgage gives you a lot of leverage in obtaining more home than you which you could pay cash. Like all investments they can either go up or down. And therein lies the problem with today’s mortgage foreclosure mess. Everyone bought their home assuming that home values only went up! No Virginia, home prices like any investment can fall in value. Just because you live in this investment doesn’t guarantee you appreciation and a profit.

Now we have the quandary that the mortgage that gave you the leverage to purchase your home, i.e., the investment is also a CONTRACT to promise to repay the loan in full to the lender that made the loan. Our entire nation is based upon “The Rule of Law” and contract law is the oldest part of this system.

But for some reason many in society today feel that the rule of law shouldn’t apply to your mortgage contract with the bank or lending institution. That for no reason in particular because you lived in the investment you should not be obligated for any losses from declining home values. In essence they think the bank should “take the loss” and not them the person that entered into the contract of a promise to repay.

In fact, there are no companies out there that advise people how to do a “Strategic Default”. That is you knowingly quit making mortgage payments even though you could afford to continue making them. One such company is youwalkaway.com and they even charge clients to make a profit to tell them how to quit paying on their mortgage.

In my opinion that company should be taken to court for they are providing a service that in of itself is highly unethical. And the case could be made that they are coercing people to break legally-binding contracts. They say it’s just a good business decision to ignore the contract you signed.

Really? In that case why have contracts. Why not just renege on any investment that doesn’t go your way? Why even have accountability in society?

Do we really want to just throw away hundreds of years of contracts law in the United States?

In my opinion at the very least anyone that walks away from their mortgage obligation when they had the ability to continue making payments should have a lifetime ban for ever purchasing a home, car, or any product for anything other than cash.

If you cannot live by the “Contractual Rule of Law” you should not enjoy the benefits of it.

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