"Moral Hazard" a Thing of the Past......What do you think? "You just got to do what you got to do"- Foreclosures & Short Sales

"Moral Hazard" a Thing of the Past......What do you think?

Should individuals be held to a higher standard than "Big" business? Companies file bankruptcy all the time and start over, why should you judge and individual for making the same financial decision?

I am referring to this with regards to the housing industry and what many now consider "old school" thinking that, if you took out the loan, you owe on it, it is your obligation and you just don't walk away from your obligation "IF" you can afford it.

I say "old school" because here in Las Vegas, I don't think most feel the "obligation" anymore and I think we will continue to see many more "walk aways", short sales and foreclosures due to the walk aways, (or the banks refusal to complete short sales in a timely manner.)

For the many that "CAN" afford their mortgage payments, they will choose to walk away as a financial decision to better their family, because they are typically over 50% (or more) Underwater on their Las Vegas home and they now know they may never see their homes value come up to what they owe.

Should you judge ?

Don't think I would, as you just Never know what is "really" going on in that situation.

Maybe they also know they may loose their job in a few months and feel the need to "Get out now while they can" and save some money....(this happens a lot here now especially in the construction industry now as many construction jobs now are smaller jobs than during the past years of the boom.

There could also be looming family issues, possible separation/divorce, etc. and many times it is financial stress that breaks up a family, so who's to say that maybe dumping their home saves their marriage.

Now, if you are doing a short sale for the owner, you will know some of the details, but that doesn't mean you know it all and honestly I don't want to know it all!

So, in this day and age, maybe, "You just got to do what you got to do"

"Moral Hazard" a Thing of the Past......What do you think? "You just got to do what you got to do"- Foreclosures & Short Sales

I am in no way condoning anyone to walk away from their obligation, this is just a topic that comes up a lot these days.