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Mortgage morality meltdown: Law prof says go ahead, stiff the bank!
By Stephen Bloom | November 29, 2009
You’re stupid if you pay your mortgage. A “woodhead.”
If you bother to repay the bank what you owe, you’re an overly emotional victim of “social control,” driven by silly embarrassment and shame. Basically, you’re a fool. That’s the word from University of Arizona law professor Brent T. White, author of Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis.
Professor White’s shocking advice to go ahead and stiff your mortgage lender will be popular with millions of struggling American homeowners, especially those who owe more than their house is worth. Everyone loves a guilt-free easy way out!
And amazingly, White doesn’t stop there. According to the San Francisco Chronicle, he also recommends that when you default, you do it “strategically.” In other words, he suggests using your credit and the money you save skipping mortgage payments to buy everything you need to get through the next couple years, right before you officially quit paying the bank!
But is defaulting on your mortgage debt really okay? Is it legit for a Christian homeowner to embrace White’s view that stiffing your bank is perfectly moral?
Aside from the practical and legal consequences (and there can be many, especially if you live in a state that doesn’t restrict deficiency judgments), isn’t your promise to repay a debt still your promise to repay a debt? You didn’t promise to repay your mortgage only if it was convenient or only if the value of your house kept going up. You promised to pay it back, in full, with interest.
“The wicked borrow and do not repay” says Psalm 37:21, and that timeless counsel is still valid, despite the clever rationalizations Professor White and other creative legal minds might dream up. It’s Christian Ethics 101. You make a promise, you keep it.
I’ve heard so many encouraging stories from clients and readers who faced tough financial challenges, but still did everything they could to pay their debts in full. For some it took years. But they were blessed in the process and deeply joyful in the end. You can experience the same blessings and joy, by keeping your promises and paying back what you owe.
Question: Have you been blessed when you kept a difficult promise?
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December 1st, 2009 at 7:56 am
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December 1st, 2009 at 11:39 pm
Nice post & nice blog. I love both.
December 5th, 2009 at 8:42 pm
Enjoyed reading this! When Juan lost his job over the summer we did everything we could to make sure bills were paid and that we didn’t have to drain our savings. We went without a full time income for several months. Juan even delivered pizzas. Which to my dissapointment people jokingly made fun of. I felt very blessed that the head of our household would do whatever it took to provide for us.
When Juan was offered a Job as a Agent for the dept. of banking (aka repossesor). I had mixed feelings about him repossesing others vehicles. I kept thinking what if they fell on hard times, what if it’s a single mom ect. ect.
Throughout the last couple of months we have come to realize that a large percent of the “owners” have either been financially irresponsible and have overextended themselves.
Juan has went to pick up a car and more often then not the person says “I have the money in the bank. I will pay what I owe right now” and they have. Makes you wonder why they didn’t just pay it in the first place. He’s also heard often “Oh I thought my spouse was making the payment or I forgot”. Some have reasons but most have excuses.
You have to wonder what kind of a person would encourage people to stiff their bank….
December 6th, 2009 at 4:59 pm
Thanks for sharing your great real life insight, Jen.
December 14th, 2009 at 7:29 am
Nice post. I enjoyed reading this.
January 22nd, 2010 at 3:20 am
Nice post! This post makes me think of what is really the right thing to do.