John Williams wrote:
On Wed, Oct 20, 2010 at 8:09 PM, David Hobby <hob...@newpaltz.edu> wrote:
Hi. I'm with Keith on this. A mortgage is not an
absolute promise to pay back the loan. Rather, the
deal is that if the borrower does not keep up payments,
the lender can take back the property.
I'm not sure why you imply that I disagree with that, assuming we are
talking about a nonrecourse loan, which is what I assume Nick has.
John--
Oh? How about this quote:
John Williams wrote:
> >
> > Only if you consider honesty and keeping your word to be ridiculous.
> > An honorable person would not agree to borrow money from anyone,
> > even a loan shark, if they thought that there was any possibility
> > that they would not be able to honor their agreement and pay back
> > the money that they borrowed.
It sounds like disagreement to me.
But the issue is that Nick, for whatever reason, is not walking away.
Instead, it seems he tried to get the lender to accept payback of less
than he borrowed, but the lender did not agree to it.
Not speaking for Nick, but it certainly seems reasonable to
point out to the lender that you could just default on the
loan, leaving them in an even worse position than simply
reducing the payments. You can't make them bargain, but
it could well be in the mortgage holder's best interest.
...
Another complication is that many of the mortgages are now owned,
directly or indirectly, by the Federal government. That is what I
meant when I wrote earlier that not paying back the full loan amount
can ultimately result in the average taxpayer footing the bill.
That is unfortunate.
---David
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