Whatever happened to "It's the right thing to do"?

I recently read an article that left me quite depressed. It was about people who have taken out large home equity loans for vacations and other non-essentials. Now that real estate prices have fallen, they find themselves owing more than the house is worth. Rather than saying, "This bank lent me $200,000, and I must pay it back," they are looking at the banks as the villains who expect them to pay $200,000 for a home worth $130,000.

What's really sad is that there are so many of these bad loans out there that most of the banks will make no attempt to get their money back, thus the taxpayers are essentially bailing out people who now own boats, new cars, jewelry and other luxury items. Lenders wrote off as uncollectible $11.1 billion in these home equity loans in 2009. When the banks do settle, it's most likely for ten cents on the dollar. Christopher Combs is a real estate lawyer in Phoenix. He said, "People got 90 cents for free. It rewards immorality, to some extent." The only thing I disagree with Christopher on is the "to some extent" part. It rewards immorality. Period.

So what do the low-life cheats who are reaping these rewards have to say? Shawn Schlegel is in default on a $94,873 loan. He said, "I am not going to be a slave to the bank." But, Shawn, you signed the mortgage! You told the bank you would pay the money! Others said that the banks were indiscriminate in making loans. But the banks didn't force them to take out loans. I have never yet been into my bank when they stuck a gun into my ribs and said, "You must sign this loan and be our slave."

Marc McCain is a Phoenix lawyer who has been retained by 300 new clients in the past year. Fewer than 5 percent of them said they would continue paying their home equity loans no matter what. Darin Bolton defaulted on loans in Chicago because "we felt we were just tossing our money into a hole." No, Darin, it wasn't your money. It was the bank's money.

McCain said, "It's come to the point where morality is no longer an issue." What a sad, sad commentary!

"Home equity loans go unpaid." The Dallas Morning News; August 25, 2010; p. 17A.