Kathy Wall

Short Sale vs. Foreclosure – Ethical Considerations
January 28, 2010 · · 5 Comments

I have recently begun thinking a lot about the ethical considerations of short sales and foreclosures.    Please believe me when I say that I am completely empathetic with those people who are losing their homes because they were  tricked into going for one of those terrible loans or because they have lost their job.   That being said, I question the ethical decision making process in a lot of  other cases.   Just a couple of examples:

We hear stories all the time about people who bought second, third and fourth homes using those crazy interest only, “pay what you want, when you want to” loans.    They all thought that they were going to be land barons, making big bucks on the rentals or buying the property, fixing it up and flipping it for a huge profit. 

Now, the homes that they bought in Fresno, Sacramento, Lodi….heck, all over the country… are no longer worth what they paid for them and, because of the economy, they can no longer require the high rents they were getting in the beginning.    In many cases, the owners can still afford to make the payments, but now don’t want to because they feel the value is not there, so they simply walk away from the properties.      That seems wrong to me.   Read more