Morality of Strategic Defaults – Part 2 (the response)
Here are a couple of contrasting responses to yesterday’s article on the morality of strategic defaults from a couple of my Facebook friends:
“The banks took the risk of extending loans for properties that common sense says could not indefinitely continue to increase in value as rapidly as they had been. They have much more experience dealing with market valuation than the average home buyer… I say the risk falls largely on the banks. It comes down to a simple business decision in the end, and you have to ask yourself how quickly the banks would terminate a contract were the rolls reversed. My .02.”
Here’s the counter-point another friend made:
“If the note says “I agree to pay” and you are able to pay, then how are you being a person of integrity if you don’t? If you follow the path of turning something in whenever it suits you because you now owe more than its value, every new car purchased would be turned in when you are ready for something different.”
Though I am emotionally compelled by the first statement, my conscience won’t let me escape the second.
I’m reminded of the 80’s film The Mission starring Robert De Niro and Jeremy Irons. In short, De Niro and Irons play Jesuit priests who run a mission in South America that is in danger of seeing the natives enslaved due to a redistribution of land and political rule between Spain and Portugal. De Niro’s character holds the view that The Mission must be defended at any costs (the 1st view above), Iron’s character holds that whatever comes they cannot resort to violence, charity must overrule, and sacrifice for the sake of higher principle supercede personal feelings (the 2nd view above) . In the end, both have compelling reasons for their convictions and hold steadfastly to them. Sadly, neither survives the bloody massacre that ensues.
Hopefully, our story will have a better ending.