It was just recently that I was informed of a situation that utterly surprised me.
It seems there is some sort of a trend out there in America where people who have fallen on hard times are choosing to just not pay their mortgage payments anymore. They have lost their job, been downsized or they just can't afford to make the payment for any reason. Generally, these are middle to upper class people with a family and a sizeable mortgage or upscale home.
What is interesting about this is the posture of the mortgage company: They seem to have taken a passive approach to this trend and are not aggressively taking any action (like foreclosure)that will uproot the occupants of the home where payments have stopped. The mortgage companies just don't want the bad press. They don't want to be accused of kicking people out of their precious homes.
These homeowners know this attitude exists and are taking advantage of it. I have heard and seen cases where mortgage payments are not and have not been made for years and the homeowner still lives in the home.
What seems to be the tipping point is if the house is "under water" where the "appraised" value is less than the amount of the mortgage. The homeowner just can't see paying on something that has NO equity. The bank or mortgage company doesn't really want to foreclose and dispose of property where they cannot recoup their loan. So they just do nothing or delay their punitive alternatives.
I am told this is the New Normal: if you can't pay your mortgage payment anymore, then don't. Forget that you have signed a document saying you have legally entered into a contract to repay the amount you are loaned. The only thing you lose for the foreseeable future is your credit rating and if you have no credit card debt to begin with or pay cash for everything, then who really needs a good credit rating?
What happen to the personal obligation to honor a contract that you have signed? What happen to the concept that a man keep his word and payback what he has borrowed?
Is this the New Normal or is HONOR dead in America?
