What's next, debtor's prison?
"To be honest, Congress should enact legislation making it a crime to walk away from a mortgage because the market value is less than the mortgage. It is morally bankrupt to do so, and imo, it should be a crime" has got to be one of the crazier statements around here besides the Illuminati.
Mortgage contracts (like all loans) are simply business contracts where someone has agreed to give back some collateral if they stop making payments. Nothing moral or ethical about it. None of these problems would exist if there was reasonable underlying value to the asset used as collateral. It's the fault of the lender for not requiring better collateral on the loan obligation.
Not surprisingly it's somehow gotten a lot harder to get a zero-down no documentation loan these days. Banks are even having to reevaluate their lending practices to the point that credit limits are being cut on the best of customers.
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