Dear Victorious,
My husband and I are upside down in our house - owing more on the mortgage than the house is worth. We've been reading about strategic defaults and are thinking about doing that. It would free us up to purchase another house, taking advantage of a better mortgage rate and buying another house at a more realistic price. Overall it seems like a pretty wise thing to do. But my mother says its immoral to do this. We don't see anything wrong with it. What do you think?
Zelda R. - Sugar Land, TX
Dear Zelda,
Your mother is right. It is immoral. When you "strategically default," the bank and its shareholders bear the brunt of your poor investment. It is unfortunate that you and your husband made a bad investment in real estate. However, those are the natural consequences of our decisions in life. That fact that you are "upside down" in your home should not be the catalyst for a financial decision. Moreover, the fact that you can stick the bank with your losses and get away with it should not be a factor in your decision. God's people don't screw their banks and mortgage companies. It is that simple. Listen to your mother.
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