Interesting Questions

2 Responses to Interesting Questions

1. Davidwhitewolf says:

   September 30, 2010 at 10:15 am

   I was at a local realtors’ business roundtable meeting the other day (as an invited expert on credit) and it turned into a big fight about the morality of “strategic foreclosure” by individuals and families. One side said that was morally indefensible because you’re breaking your contractual promises to pay your mortgage even though you can still afford it. The other side said a) families and individuals should be able to make business decisions to default just like corporations that intentionally stop paying the mortgage on buildings they own (a common occurrence, these days) and b) the lenders and securitizers of the loans priced the risk of default into the loans anyway. Sucks to be them if they judged the risk wrong.

   Having seen the mortgage meltdown from somewhat of an insider role, I’d have to agree with the latter view. Everybody on the financial side of things knew exactly what was going on and participated anyway.
   As a corporate attorney, I’d also note that we always write contracts with the expectation that we or the other side will breach at some point based on changing business conditions. It’s a fact of life nowadays, so you build protections into the contract language in anticipation.
2. DFWMTX says:

   September 30, 2010 at 1:24 pm

   I like the famous-violinist situation presented in the article. Unfortunately we’re not hooked up to famous violinists. The responses would differ greatly if instead of being the kidney dialysis machine for a famous violinist one were hooked up to the homeless guy begging for change in front of the nearest 7-11.
   And really, why should we be compelled by this sense of common decency to marginally help others at a detriment to ourselves? If we could be assured this homeless person we’re hooked into would suddenly change his/her life, get an education, home, and job, we’d be more likely to help. But we know this is a rare case; homeless often live from helping hand to helping hand and continue living homeless. The same can be said for bears who’ve been fed for so long by “kind-hearted” humans they forget how to hunt/forage on their own, or chronic welfare recipients. Imagine that homeless person you’re hooked up to keeps going on alcoholic benders every night. Are you still likely to help him/her? Most likely not. But because you’re looking at your own interests of keeping your hard-earned resources versus diminished returns of helping those chronically in need, the liberals call you “greedy”. “How dare you want to use that money for a vacation for yourself, or to save for your kids’ college fund when it should be used to help the poor and down-trodden! What are you, some kind of heartless monster?” It’s a sad thing to learn, but sometimes there are those who we just can’t help. Even though we desire to because to try and help them, doing so would become a detriment to ourselves, or in fact may be beyond our ability.

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