An Oroville client of mine called me today…said he was feeling guilty about not making the payments on his home because at last Sunday’s Church sermon the preacher told the congregation to “honor your contracts”.
Now I’m not advocating any particular position on whether it’s right or wrong to stop making the payments on your home, but I did provide him with some thoughts to consider.
Part of his contract with the bank says that the bank’s remedy for default is that they get the house…by giving them the house back he’s just honoring the contract.
If the bank instead allows him to short sale the house for less than is owed, there will be an amended contract, one that allows him out of his loan in exchange for finding a buyer who will pay an acceptable price to the bank. He’d be honoring that amended contract.
The bank was happy to make him a terrible ‘no-interest loan’ because they figured (wrongly) that the house would go UP in value and if they had to foreclose they’d easily make all of their money back…WHOOPS big mistake bank!
The bank has no conscience and wouldn’t (didn’t) think twice about scr**ing him, should he feel bad for doing the same to the bank?
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