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Are you morally obligated to repay a loan that you take?[W:461]

Is there a moral obligation to repay money you borrow?

  • If you borrow money, you are morally obligated to repay it.

    Votes: 91 92.9%

  • I feel no moral obligation to repay loans I've taken out

    Votes: 7 7.1%
  • Total voters
    98
tres borrachos said:
Declan - nobody faced foreclosure because they were underwater. In fact, you can be seriously underwater and still continue to live in your home for many years until the value increases while the principal balance decreases.
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I never said or suggested anybody was forced to do anything just because they were underwater. Now when financial sector employees started losing their jobs by the boat load, they obviously were forced into foreclosure if their mortgages exceeded their unemployment benefits.
 
Declan said:
I never said or suggested anybody was forced to do anything just because they were underwater. Now when financial sector employees started losing their jobs by the boat load, they obviously were forced into foreclosure if their mortgages exceeded their unemployment benefits.
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Then I apologize, I misunderstood your post:

While I agree that people should pay their bills--I wouldn't have defaulted if I were underwater during all that as a choice-
 
Papa bull said:
Right.... and it's not the borrower's job to repay loans they took willingly and freely....
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Not if there's no financially sound reason (on the lender's part) that the loan ever should have been extended in the first place.

Most people are not sophisticated enough to know how soon - or even whether - they can realistically pay back a loan, and the lenders took full advantage of that fact. Add to that a dozen pages of terms that even lawyers can't agree on, and the lack of personal responsibility on the lender's part is glaringly obvious. That's what you're continuing to deny.
 
Papa bull said:
I can only shake my head and wonder how in the world you could possibly assume that the flood of mortgage defaults that fueled the financial crisis as mortgage backed securities became worthless were actually just a symptom of the financial crisis instead of the cause. You are basically trying to assert that people defaulted on their mortgages because the banks were heavily invested in them. How much the banks were invested in mortgages had no bearing whatsoever on whether Joe Blow, you or anyone else was going to stop making mortgage payments.

Stats showed that, on average, foreclosures occurred on people that hadn't made a mortgage payment in over 500 days. That's about a year and a half of living free rent at the expense of the mortgage company and ultimately everyone else in the country as the losses spread around and we all shared the pain. There's not much difference between that and outright stealing.
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Right, here's a story that says the average was 674 days in 2012. And read why. Basically, a mortgage comes with it very specific "shall" requirements to register the original mortgage and any assignments in the county courthouse or equivalent, and during the bubble, lenders routinely ignored "shall" requirements, perhaps for speed, perhaps to save on recording fees and taxes. So the mortgage might have changed hands 6 times, and none of them recorded. So when the last guy holding the bag goes to foreclose, it often can't even prove that it has the right to seize and sell the property. They expected, I suppose, that courts would say - hey, close enough - you ignored a bunch of crystal clear "shall" language in the law, but we'll take your word that you have the mortgage and can seize this house worth $300,000, sell it, and keep the proceeds!!! Brilliant move by lenders.

In other cases, they've lost the original loan documents (the thing that says, Borrower owes lender $X) and again, expected the courts to say, OK, we'll take your word that the person sitting here in court actually DOES owe you $250,000. In still other cases, the foreclosure process requires people to swear to stuff - like they have the mortgage and the note and actually, you know, are owed some money and have the legal right to seize the property and sell it and keep the money. Basic stuff. And instead of people actually doing all these things - examining the documents and that kind of thing - they had $10 an hour clerks sign their name 500 times a day, swearing they've done these things but which had not been done. So, hilariously, Jane Doe, the loan officer who can swear to this stuff, will have 40 completely different signatures, because Jane Doe didn't sign any of them, and no one did what they swore Jane did. Sometimes in the same foreclosure package, Jane Doe will have different signatures in that package!! LMAO at the incompetence that demonstrates.

And again, this is all the deadbeat's fault, that banks didn't take the most basic steps to protect their interest in a loan and in the collateral behind it. The amount of excuse making for idiots and crooks is pretty hilarious.
 
JasperL said:
Right, here's a story that says the average was 674 days in 2012. And read why. Basically, a mortgage comes with it very specific "shall" requirements to register the original mortgage and any assignments in the county courthouse or equivalent, and during the bubble, lenders routinely ignored "shall" requirements, perhaps for speed, perhaps to save on recording fees and taxes. So the mortgage might have changed hands 6 times, and none of them recorded. So when the last guy holding the bag goes to foreclose, it often can't even prove that it has the right to seize and sell the property. They expected, I suppose, that courts would say - hey, close enough - you ignored a bunch of crystal clear "shall" language in the law, but we'll take your word that you have the mortgage and can seize this house worth $300,000, sell it, and keep the proceeds!!! Brilliant move by lenders.

In other cases, they've lost the original loan documents (the thing that says, Borrower owes lender $X) and again, expected the courts to say, OK, we'll take your word that the person sitting here in court actually DOES owe you $250,000. In still other cases, the foreclosure process requires people to swear to stuff - like they have the mortgage and the note and actually, you know, are owed some money and have the legal right to seize the property and sell it and keep the money. Basic stuff. And instead of people actually doing all these things - examining the documents and that kind of thing - they had $10 an hour clerks sign their name 500 times a day, swearing they've done these things but which had not been done. So, hilariously, Jane Doe, the loan officer who can swear to this stuff, will have 40 completely different signatures, because Jane Doe didn't sign any of them, and no one did what they swore Jane did. Sometimes in the same foreclosure package, Jane Doe will have different signatures in that package!! LMAO at the incompetence that demonstrates.

And again, this is all the deadbeat's fault, that banks didn't take the most basic steps to protect their interest in a loan and in the collateral behind it. The amount of excuse making for idiots and crooks is pretty hilarious.
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Everyone is responsible except the people that signed for the loans they defaulted on by your way of thinking. I think it's hilarious that you've gone to such extremes to make excuses for the idiots/crooks that stopped paying their mortgages while living rent free for 1-2 years.
 
DifferentDrummr said:
Not if there's no financially sound reason (on the lender's part) that the loan ever should have been extended in the first place.

Most people are not sophisticated enough to know how soon - or even whether - they can realistically pay back a loan, and the lenders took full advantage of that fact. Add to that a dozen pages of terms that even lawyers can't agree on, and the lack of personal responsibility on the lender's part is glaringly obvious. That's what you're continuing to deny.
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You know what you make. You know what your mortgage payments are going to cost. You know what you have to have to make ends meet. If you don't, you're a blithering idiot that SHOULD. "I didn't know that I didn't make enough money to pay my mortgage" is nonsense. Most of them knew damned well whether or not they were in over their head or not. Most just didn't care because they thought they thought they were getting something for free - a home that could only ever go up in value... a home that they could sell in a few years for enough to pay off the mortgage and pocket a few thousand. They gambled and lost and made everyone else pay for their mistakes when they decided they weren't going to continue paying since the "free money" they thought they signed up for wasn't going to happen.
 
DifferentDrummr said:
Not if there's no financially sound reason (on the lender's part) that the loan ever should have been extended in the first place.

Most people are not sophisticated enough to know how soon - or even whether - they can realistically pay back a loan, and the lenders took full advantage of that fact. Add to that a dozen pages of terms that even lawyers can't agree on, and the lack of personal responsibility on the lender's part is glaringly obvious. That's what you're continuing to deny.
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And those lenders for the most part paid the price of doing business that way. They are no longer in the lending business.

But the bottom line is stupidity or ignorance isn't an excuse. The lenders who did that enabled people to be stupid. Luckily, most people weren't. Logic tells you that if you make $40,000 a year you can't move into a house that costs $600,000 and you can do it by putting off your principal payments for 5 years. And as far as the people who used their houses as piggybanks, those people were stupid too, and very irresponsible.
 
Papa bull said:
You know what you make. You know what your mortgage payments are going to cost. You know what you have to have to make ends meet. If you don't, you're a blithering idiot that SHOULD. "I didn't know that I didn't make enough money to pay my mortgage" is nonsense. Most of them knew damned well whether or not they were in over their head or not. Most just didn't care because they thought they thought they were getting something for free - a home that could only ever go up in value... a home that they could sell in a few years for enough to pay off the mortgage and pocket a few thousand. They gambled and lost and made everyone else pay for their mistakes when they decided they weren't going to continue paying since the "free money" they thought they signed up for wasn't going to happen.
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i believe this is the first post in the entire thread in which i agree with you
 
tres borrachos said:
And those lenders for the most part paid the price of doing business that way. They are no longer in the lending business.
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Nor should they be. But if that's the only price they paid, they got off cheap.

But the bottom line is stupidity or ignorance isn't an excuse. The lenders who did that enabled people to be stupid. Luckily, most people weren't. Logic tells you that if you make $40,000 a year you can't move into a house that costs $600,000 and you can do it by putting off your principal payments for 5 years. And as far as the people who used their houses as piggybanks, those people were stupid too, and very irresponsible.
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Agreed, but that doesn't make these people immoral, as PB contends.
 
Papa bull said:
You know what you make. You know what your mortgage payments are going to cost. You know what you have to have to make ends meet. If you don't, you're a blithering idiot that SHOULD. "I didn't know that I didn't make enough money to pay my mortgage" is nonsense. Most of them knew damned well whether or not they were in over their head or not. Most just didn't care because they thought they thought they were getting something for free - a home that could only ever go up in value... a home that they could sell in a few years for enough to pay off the mortgage and pocket a few thousand. They gambled and lost and made everyone else pay for their mistakes when they decided they weren't going to continue paying since the "free money" they thought they signed up for wasn't going to happen.
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Such BS, no one has a crystal ball, no one has absolute knowledge of future income.....and very few could foresee the extent of the 2007 collapse. Your argument remains as irrational as ever.
 
DifferentDrummr said:
Nor should they be. But if that's the only price they paid, they got off cheap.



Agreed, but that doesn't make these people immoral, as PB contends.
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I don't know how PB defines moral, so I can't comment on that last part. But there were a lot of people who did act immorally - including the ones who lied about their income. No doc mortgages were very popular. And lots of them, if not most of them, ended up in default.

I don't know if they got off cheap.....they lost their jobs.
 
Gimmesometruth said:
Such BS, no one has a crystal ball, no one has absolute knowledge of future income.....and very few could foresee the extent of the 2007 collapse. Your argument remains as irrational as ever.
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It wasn't an argument. It was a fact. And I'm not surprised to hear you say that you think facts are irrational. I figured that out about you long before you said it.
 
Papa bull said:
It wasn't an argument. It was a fact. And I'm not surprised to hear you say that you think facts are irrational. I figured that out about you long before you said it.
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It is a fact.....that everyone knows their future income.

Irrational BS.
 
tres borrachos said:
I don't know how PB defines moral, so I can't comment on that last part. But there were a lot of people who did act immorally - including the ones who lied about their income. No doc mortgages were very popular. And lots of them, if not most of them, ended up in default.

I don't know if they got off cheap.....they lost their jobs.
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No doc mortgages were a creation of lenders, that makes them the "immoral" agent and instigator.
 
Gimmesometruth said:
It is a fact.....that everyone knows their future income.

Irrational BS.
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Irrational strawman. Yours, of course.

I was commenting on this statement: "Most people are not sophisticated enough to know how soon - or even whether - they can realistically pay back a loan".

People that don't know whether they can afford their mortgage payment are blithering idiots. I'm not surprised that you sympathize with them. My statement had nothing to do with crystal balls, predicting the future or any other crap you'd like to assign to me because you can't refute what I ACTUALLY said.
 
Papa bull said:
Everyone is responsible except the people that signed for the loans they defaulted on by your way of thinking. I think it's hilarious that you've gone to such extremes to make excuses for the idiots/crooks that stopped paying their mortgages while living rent free for 1-2 years.
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Frankly I do agree some borrowers have unethically exploited the system to delay foreclosures. The loan document says if you don't pay, you get kicked out, lose the house. So they should have delivered the keys at some point, and moved on with their lives. Not doing so is IMO immoral unless the borrower had a legitimate dispute with the lender, were current, etc. Not many of these examples..

But I look at it kind of this way. If the bank instead had a POLICY of leaving the cash drawers open at night and the front door to the bank unlocked, yes, the thieves who walked in and stole the money are criminals who should be prosecuted and sent to jail, but I have a hard time finding any sympathy for the bank who set their "security" up like that.

These lenders literally couldn't be bothered with the crystal clear SHALL legal requirements of mortgages and home loans and what it takes to foreclose etc. And it wasn't oversight - this was POLICY to ignore these things. It was POLICY to fraudulently process the foreclosure docs, POLICY to not bother securing the original notes, etc.
 
Papa bull said:
What part of this are you unable to comprehend:

"Foreclosures are, and have been, the epicenter of the collapse of the housing and credit markets and overall economy."

Tell me which big words are confusing you and I'll see if I can help you understand what they mean.
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The word you're confusing is "epicenter." Just read the whole article and come back if you still aren't clear on it.
 
JasperL said:
Frankly I do agree some borrowers have unethically exploited the system to delay foreclosures. The loan document says if you don't pay, you get kicked out, lose the house. So they should have delivered the keys at some point, and moved on with their lives. Not doing so is IMO immoral unless the borrower had a legitimate dispute with the lender, were current, etc. Not many of these examples..

But I look at it kind of this way. If the bank instead had a POLICY of leaving the cash drawers open at night and the front door to the bank unlocked, yes, the thieves who walked in and stole the money are criminals who should be prosecuted and sent to jail, but I have a hard time finding any sympathy for the bank who set their "security" up like that.

These lenders literally couldn't be bothered with the crystal clear SHALL legal requirements of mortgages and home loans and what it takes to foreclose etc. And it wasn't oversight - this was POLICY to ignore these things. It was POLICY to fraudulently process the foreclosure docs, POLICY to not bother securing the original notes, etc.
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allow me to offer an alternate perspective of this
the borrowers who opted to continue to reside while they were in default of their mortgages were a good thing for the lenders in many instances
obviously, when so many distressed properties come on the market at the same time, the supply exceeds demand, driving the values down, even at liquidation value
thus, it was in the lenders' interest to not overwhelm the market place with so many distress/foreclosure sales
and then there is the aspect of care and preservation of the banks' collateral: those homes
without residents, those houses were susceptible to damage from vandals and vagrants, causing the lenders to incur costs to try to secure them
those empty properties also had to be winterized, which was not required with a family continuing to reside there
it also provided the defaulting debtors with an opportunity to place the home on the market and arrange a short sale, thereby saving the bank the same effort
those residents were also better positioned to participate in HAMP, whose rollout was probably executed even worse than the website for Obamacare
while you see those defaulted borrowers as benefitting from not having to pay rents, the reality was the banks also benefitted from not having to incur more costs to preserve their collateral while simultaneously allowing the market to better absorb the discounted housing at better prices than would otherwise have been experienced
 
tuhaybey said:
The word you're confusing is "epicenter." Just read the whole article and come back if you still aren't clear on it.
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Wow. I posted the exact quote and it's like you can't read English at all. I'd post it again but I don't think you'd be any more apt to read and comprehend that sentence the second time.
 
justabubba said:
allow me to offer an alternate perspective of this
the borrowers who opted to continue to reside while they were in default of their mortgages were a good thing for the lenders in many instances
obviously, when so many distressed properties come on the market at the same time, the supply exceeds demand, driving the values down, even at liquidation value
thus, it was in the lenders' interest to not overwhelm the market place with so many distress/foreclosure sales
and then there is the aspect of care and preservation of the banks' collateral: those homes
without residents, those houses were susceptible to damage from vandals and vagrants, causing the lenders to incur costs to try to secure them
those empty properties also had to be winterized, which was not required with a family continuing to reside there
it also provided the defaulting debtors with an opportunity to place the home on the market and arrange a short sale, thereby saving the bank the same effort
those residents were also better positioned to participate in HAMP, whose rollout was probably executed even worse than the website for Obamacare
while you see those defaulted borrowers as benefitting from not having to pay rents, the reality was the banks also benefitted from not having to incur more costs to preserve their collateral while simultaneously allowing the market to better absorb the discounted housing at better prices than would otherwise have been experienced
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I looked at some of these homes a few years ago when I was buying. The people living in them trashed them and many were stripped of anything that would have been of value. Seems they didn't care what shape they left the house in since it was going to be owned by evil banks. What else could we expect from deadbeat chiseled and scammers?
 
Papa bull said:
Irrational strawman. Yours, of course.

I was commenting on this statement: "Most people are not sophisticated enough to know how soon - or even whether - they can realistically pay back a loan".
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You know exactly what I was pointing to in your comments, twice it has been highlighted and it is you who is hypocritically avoiding your previous "thought". No one knows what there income will be, especially in a crash. You are still dancing from your irrational idea.
 
Re: Are you morally obligated to repay a loan that you take?

radcen said:
Difficult to pay? You mean like the lender picks up and moves in the middle of the night with no forwarding address?
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No. Like you want to pay and offer to pay but their minimum payment is too high so they asses no payment charges, etc. That can screw with people big time.
 
Papa bull said:
Wow. I posted the exact quote and it's like you can't read English at all. I'd post it again but I don't think you'd be any more apt to read and comprehend that sentence the second time.
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Ok, I'll help you out- the epicenter of something isn't the cause of an earthquake, it is the center of the devastation caused by an earthquake. Now, with that in mind, re-read your source.
 
tuhaybey said:
Ok, I'll help you out- the epicenter of something isn't the cause of an earthquake, it is the center of the devastation caused by an earthquake. Now, with that in mind, re-read your source.
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Center. Point of origin. Mortgage foreclosure a were it.

I led you to water. Stuck your face in it and you still died of thirst. Now I'm just beating a dead horse.
 
I have a twist on this that may or may not have been discussed already.

Suppose you have a loan with a co-signer - are you morally obligated to keep up with payments on that loan so as not to negatively impact the co-signer?
 
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