Ethics of Walking Away

I recently received an email from an obviously upset person. The title of the email was “You make me want to vomit.”  They went on to say:

Personal responsibility means nothing anymore.  I’m willing to bet you’re all of bunch of lawyers and therefore cannot even spell “ethics” let alone define it.

I went on to respond by saying:

Dear Sir,

I appreciate your honesty.  I first off want to say I am not a lawyer.  I started You Walk Away because I saw a tremendous demand for people that needed help through foreclosure.  I wish you could come by our office and listen to some of the phone calls that we get from troubled home owners.  I don’t deny that our name is controversial or maybe disturbing to some, however I do believe that people need to know that if they have tried all other ways to avoid foreclosure, they should be able to walk away as whole as possible. Yes there are some people out there that are irresponsible and when things get tough they simply give up.  We have found however that most of our customers are in tremendous need for assistance and haven’t been helped by non-profits or their lenders.  It’s not our job to judge what their motives are, we just try to help as many as possible.  I don’t recall people discussing the ethics of selling someone (or approving a loan for) a home they wouldn’t be able to afford. People were offered the american dream and many took the opportunity, not completely understanding how it could affect them.

Lenders don’t care about the homeowners circumstances, they care about mitigating their losses or making a profit.  That’s not necessarily a bad thing, they are a company that is in business to make money.   We are a loss mitigation company for homeowners. If someone is in the horrific place of losing their home, they should get help and hope and know that they can make it through this time and come out the other end (using the law) as whole as possible.  Many people we talk to, are out of a job, have had illness, have exhausted their entire savings, 401k and have used credit cards to offset their financial shortage. Some are looking to bankruptcy and foreclosure.  Many of our customers have been able to stay in their homes (not abandoning the property) until the lender forecloses legally and during that time, pay down bills and get back on their feet.  I know you may not agree with our strategy, but we found a need and are filling it.  We stay with our customers over the entire period. We are their shoulder to lean on and we help educate them.   It’s tough out there for millions of people and it’s not getting better any time soon.

Jon,

Thanks for taking the time to respond.  I was surprised that you did.   As

you say, your company name carries an unfortunate connotation.  I’m sure

that there are many people who got into trouble without any intent to

deceive or game the system.   Many, however, may have been dishonest or

otherwise culpable.

I have no sympathy for the lenders.  They should have been the adults at the

table, but instead they acted like pigs.  Excessive greed and short

sightedness have endangered our capitalist way of life.  We may not recover

from this mess for a generation.  Regardless of what the government does.

All of this debt needs to be unwound and will be.  And people will suffer.

Those that contributed to it should suffer more than those of us who didn’t.

I played by the rules.  I bought a house in 2004.  I paid for it in 5 years.

It’s worth 40% less than what I paid for it.   Is someone going to bail me

out?  No, I’m going to bail your clients out through higher taxes, higher

interest rates, higher inflation.

I know that you’re going to continue to do what you do.  I ask for just a

small favor.  Let each of your clients know that there are many like me to

whom they owe a debt of gratitude, and maybe an apology.

My Thoughts:

I say that if the law says the bank has no recourse other than to take back the property, they (the bank) took the risk of lending the money (they charged you interest and made a bet that the asset was adequate collateral for the money they gave you) and they by law shouldn’t complain when they have to take the property back.  There was ample money being made while the values were going up and the banks didn’t have the ethics to stop when they lent billions of dollars over and over again to people who financially couldn’t possibly pay back the loans they were given.   People were offered the American dream and many jumped at the chance.  Many were told that the values would continue to go up and that they “had to get in the market”.  Some “trusted professionals” wanted to make a sale and told people that they would be able to refinance when adjustable loans came due.  Some played it safe and stayed within their means.  Some lacked responsibility and promised to pay back money they knew they couldn’t.  Others took on to great a risk and made a mistake. Have you ever made a mistake?  I know I have made many. Even Warren Buffet has made mistakes that have cost him millions.

In Conclusion:

Hopefully all of us (including the banks) will learn from this downturn and realize that like our parents said, “money doesn’t grow on trees” or on our white picket fence.

Tagged as: Ethics of walking away, foreclosure, foreclosure blog, foreclosure crisis, foreclosure scams, Housing Crash, Jon Maddux, property values decline, walk away from your home, walking away from modified loan, you walk away