Underwater: Snorkelers versus Scuba Divers
A large number of Americans who are underwater on their mortgages would be better off financially if they walked away from their homes. They don’t because we have a double standard…individuals are told they have a moral obligation to pay their mortgages and corporations understand that contracts are to be breached when it’s not economically efficient.
- Brent White, University of Arizona real estate expert
How To Walk Away From Your Mortgage
by Lawrence Delevingne
BusinessInsider.com
2010-01-11
A moral obligation? Unlike a corporation (i.e. a group of economically-motivated individuals whose situation more closely resembles the insulated world of a SCUBA or deep sea diver than a snorkeler), an individual stands to suffer credit-wise by defaulting on a mortgage.
A corporation can lawyer its way out of debts, change its name overnight, and effectively escape culpability for malfeasance (while most of the same well-paid individuals remain in charge); if a typical individual were to attempt the same it would equate to some serious criminal charges and bankruptcy – you can’t walk out of your identity as an individual.
The economic options available to a typical individual are nothing like those available to a corporate entity – if, for comparison, an individual were to rack up $69.8 billion in debt (or even $689.00), he or she couldn’t very well expect a bailout from the government…
Such is the plight of the snorkeler – and let us not forget about the sharks…
