Morally obliged to stay in house?

[renaissance gal]

Am I morally obliged to remain in my house for which I pay a mortgage?

Here is some background information before you give me your opinion. I am a single parent of two children who live with me, plus I am paying on the parent portion of my oldest son's student loan. I divorced over eight years ago and ended up with the house, but I had a much higher income back then. Now, my mortgage payment is roughly 48% of my income and we are living a relatively austere lifestyle. No cable TV, no RV or dirt bikes or any other family fun equipment, no vacations, and I cannot afford to replace the tires on my car or paint my house without using a credit card and we eat pancakes for dinner a couple times a month. Lord help me if my sons or I need to see a doctor, as we do have heath insurance but the deductibles are high. We are surviving, but only by the grace of God. Additionally, my house is now upside-down by $80,000 and as I live in Nevada, it looks like 20 years before I will break even, which means going into old-age with mortgage (an ugly picture).

Here is my dilemma; not paying my bills is like stealing, isn't it? I mean, I made a promise to the bank that I would pay for the house when they gave me the loan, either by paying it off via mortgage payments, or via selling the house and paying the bank (impossible as I'm upside-down). Plus, I don’t want to add to the mortgage crisis in our country. So many in the world would love to have my problems if it meant they could feed their children. I get all that.

But I am becoming ever more stressed and worried about our future. It’s like being just strong enough to hang onto the cliff, I can’t seem to go up and going down feels like sin, weakness, failure, and just plain ungreatfull for what I do have.
Am I morally obliged to continue in this state since I can pay the mortgage, utilities, food, and some gasoline? Or would I be justified in walking away from the house and starting over?

[Corki]

You are not morally obligated to stay in your house. You are morally obligated to fulfill your legal financial obligations. Walking away from your house does not change your legal obligation to make payments on the mortgage, does it? Would the bank consdider you no longer obligated if you are no longer living there?

[JackQ]

Originally Posted by renaissance gal

Am I morally obliged to remain in my house for which I pay a mortgage?

Here is some background information before you give me your opinion. I am a single parent of two children who live with me, plus I am paying on the parent portion of my oldest son's student loan. I divorced over eight years ago and ended up with the house, but I had a much higher income back then. Now, my mortgage payment is roughly 48% of my income and we are living a relatively austere lifestyle. No cable TV, no RV or dirt bikes or any other family fun equipment, no vacations, and I cannot afford to replace the tires on my car or paint my house without using a credit card and we eat pancakes for dinner a couple times a month. Lord help me if my sons or I need to see a doctor, as we do have heath insurance but the deductibles are high. We are surviving, but only by the grace of God. Additionally, my house is now upside-down by $80,000 and as I live in Nevada, it looks like 20 years before I will break even, which means going into old-age with mortgage (an ugly picture).

Here is my dilemma; not paying my bills is like stealing, isn't it? I mean, I made a promise to the bank that I would pay for the house when they gave me the loan, either by paying it off via mortgage payments, or via selling the house and paying the bank (impossible as I'm upside-down). Plus, I don’t want to add to the mortgage crisis in our country. So many in the world would love to have my problems if it meant they could feed their children. I get all that.

But I am becoming ever more stressed and worried about our future. It’s like being just strong enough to hang onto the cliff, I can’t seem to go up and going down feels like sin, weakness, failure, and just plain ungreatfull for what I do have.
Am I morally obliged to continue in this state since I can pay the mortgage, utilities, food, and some gasoline? Or would I be justified in walking away from the house and starting over?

Even dioceses have declared bankruptcy. You might want to consider that option with a good bankruptcy lawyer, then start over living within your new means. I don't think it would be a sin, because you didn't get yourself into this situation deliberately. The fact that you're upside down on your house is a situation that you definitely didn't create. If you borrowed money with no intention of repaying, that would be another story. There are a lot of people in your boat.

[RosarioD]

Can you perhaps speak to your lender and restructure your loan payment? After all, if you walk away and foreclose, the bank will lose more money. You are legally obligated to pay the loan; however, there is a higher order of morality. You may not starve your children just so you can pay the loan. But since you can afford to pay the mortgage and buy food, then you are legally and morally obligated. Bad idea to declare bankruptcy without giving it serious thought.

[renaissance gal]

[quote=Corki;8008554]You are not morally obligated to stay in your house. You are morally obligated to fulfill your legal financial obligations. Walking away from your house does not change your legal obligation to make payments on the mortgage, does it? Would the bank consdider you no longer obligated if you are no longer living there?[/QUO

I consider it a moral obligation to keep my promisses, and I did promiss to repay the loan, whether or not I actually live in the house. My problem is that I'm balancing on a serious tightrope right now and any gust of wind, such as expensive home/auto repair, or medical situations would mean that I would need to suddenly move to a lower cost living situation. Since I know that life picks the most inopportune times to beat us about the head and soulders, I want to soften the inevitable future blows. I see being proactive and dumping the house before life catches up to me as both good (for my family and I), and bad (because I would be renigging on my promiss to pay back my loan) as a moral decision I should make now, before the proverbial #%#* hits the fan.

[renaissance gal]

Originally Posted by RosarioD

Can you perhaps speak to your lender and restructure your loan payment? After all, if you walk away and foreclose, the bank will lose more money. You are legally obligated to pay the loan; however, there is a higher order of morality. You may not starve your children just so you can pay the loan. But since you can afford to pay the mortgage and buy food, then you are legally and morally obligated. Bad idea to declare bankruptcy without giving it serious thought.

I live in Nevada, the state with the highest foreclosure rate and percent unemployment. In fact, given the ever-increasing homeless population and the fact that the two occasions when casinos planned to hire 100 people, they had well over 2,000 people apply, we may actually be in a depression in Nevada. So no, I do not see that the bank will work with me.

I certainly would never "starve [my] children to pay the loan." Thank goodness, I am not that bad off. My moral dilemma is precisely that I am making it (barely), but have zero wiggle room, and I see no light at the end of the tunnel. I see this situation as our future for the next 20 years, at which point I will be age 65 and still have an upside-down mortgage.

So, would it be immoral to break my promise to the bank so that I can provide more for my children right now, and also not have to spend the rest of my life in the "barely making it" mode? I mean that quite literally and am not exaggerating.

I know that there is a difference between a contract (such as a loan) and a covenant (such as a marriage), and that a covenant can never be broken because God is always the third party. However, a contract seems less than that, in that God is not a party. Am I rationalizing this away?

[JackQ]

Originally Posted by renaissance gal

I live in Nevada, the state with the highest foreclosure rate and percent unemployment. In fact, given the ever-increasing homeless population and the fact that the two occasions when casinos planned to hire 100 people, they had well over 2,000 people apply, we may actually be in a depression in Nevada. So no, I do not see that the bank will work with me.

I certainly would never "starve [my] children to pay the loan." Thank goodness, I am not that bad off. My moral dilemma is precisely that I am making it (barely), but have zero wiggle room, and I see no light at the end of the tunnel. I see this situation as our future for the next 20 years, at which point I will be age 65 and still have an upside-down mortgage.

So, would it be immoral to break my promise to the bank so that I can provide more for my children right now, and also not have to spend the rest of my life in the "barely making it" mode? I mean that quite literally and am not exaggerating.

I know that there is a difference between a contract (such as a loan) and a covenant (such as a marriage), and that a covenant can never be broken because God is always the third party. However, a contract seems less than that, in that God is not a party. Am I rationalizing this away?

No, you're not rationalizing. There are legal means to get yourself out from under this problem. The bank never acquired a right to your money that exceeds what the legal system provides for.

[renaissance gal]

Originally Posted by JackQ

No, you're not rationalizing. There are legal means to get yourself out from under this problem. The bank never acquired a right to your money that exceeds what the legal system provides for.

That is an interesting point. Thank you.

[MtnDwellar]

Originally Posted by JackQ

The bank never acquired a right to your money that exceeds what the legal system provides for.

What does this mean???

A person is obligated to make reasonable sacrifices to pay debts.

[Timothy Crown]

To Renaissance Girl:

I also live in Nevada. Actually Reno, Nevada and the housing market has collapsed
here. My best friends house bought for $225,000 went up to $265,000 and now 5 years
later is worth $115,000. My best friend got a divorce-and is in the final stages of
being legally able to walk away from his house without suffering economic hardships.

Would recommend 3 ideas. First go to your local pastor and have a honest-heart to
heart talk explaining your situation in detail with him. Also would also recommend
contact a lawyer about this situation. There are attorneys who do nothing but handle
real estate situations like you are in. My best friend has one of these specialized
lawyers handling his situation. And of course the final idea-is to ask the Holy Spirit
for guidance in this issue to do the right thing.

Hope this helps a little.

Peace in Christ,

Timothy from Reno, Nevada

[JackQ]

Originally Posted by MtnDwellar

What does this mean???

A person is obligated to make reasonable sacrifices to pay debts.

Reasonable sacrifices to be sure. But it sounds like the OP is going underwater. If you're going to say that it is wrong for her to avail herself of the legal protections of bankruptcy in light of her insolvency, I'd say that's an extremist view. Property relations are determined by the society that we live in. Originally, the world was given to humanity in common, and it was for us to determine the terms of acquisition, subject to the demands of justice. In our society, debts are due unless one can legitimately file for bankruptcy, and if it's a reorganization bankruptcy some of the debt will still be due. Now her creditors had a right to expect payment under the same terms as every other creditor. No creditor has a right to demand that its debtor not file bankruptcy when the facts warrant it.

[MtnDwellar]

Originally Posted by JackQ

Reasonable sacrifices to be sure. But it sounds like the OP is going underwater. If you're going to say that it is wrong for her to avail herself of the legal protections of bankruptcy in light of her insolvency, I'd say that's an extremist view. Property relations are determined by the society that we live in. Originally, the world was given to humanity in common, and it was for us to determine the terms of acquisition, subject to the demands of justice. In our society, debts are due unless one can legitimately file for bankruptcy, and if it's a reorganization bankruptcy some of the debt will still be due. Now her creditors had a right to expect payment under the same terms as every other creditor. No creditor has a right to demand that its debtor not file bankruptcy when the facts warrant it.

I was not saying that bankruptcy in her case is right or wrong. That is not up to me.

I will say that it does not sound like she is insolvent. She is paying her bills. She states that part of her concern is that the house will not be paid for in 20 years at her retirement age. That's not relevant. So many things can happen in that time frame. The things that she is sacrificing; cable, RV's, vacations, etc. are things that many Americans do without.

Your are right that her creditors have a right to expect payment and cannot demand that she does not file bankruptcy. Creditors have no say until after the filing.

[puzzleannie]

Originally Posted by renaissance gal

AmAm I morally obliged to continue in this state since I can pay the mortgage, utilities, food, and some gasoline? Or would I be justified in walking away from the house and starting over?

I don't understand why you cannot sell it but you know local conditions better than I do. You don't have to live there but if your name is on the mortgage you have to pay on it until you transfer or sell it. Sure you could walk away and let the bank foreclose doing permanent damage to your credit. You could also file for bankruptcy. Don't take either of those courses until you find out the real cost of doing so. there is no guarantee your living expenses will be any less, and a real possibility of heading deeper into expenses and commitments.

investigate the possibility of renting part of the house, or of inviting other family members to live with you and pay rent or share expense.

Whatever your legal obligations are, these are also your moral obligations. Whatever legal options are open to you, are also possible moral choices.

[JackQ]

Originally Posted by MtnDwellar

I was not saying that bankruptcy in her case is right or wrong. That is not up to me.

I will say that it does not sound like she is insolvent. She is paying her bills. She states that part of her concern is that the house will not be paid for in 20 years at her retirement age. That's not relevant. So many things can happen in that time frame. The things that she is sacrificing; cable, RV's, vacations, etc. are things that many Americans do without.

Your are right that her creditors have a right to expect payment and cannot demand that she does not file bankruptcy. Creditors have no say until after the filing.

She said she's upside down on her house. As much as home values have plummeted in the U.S., that in itself might put her upside down in total.

[JackQ]

Originally Posted by puzzleannie

I don't understand why you cannot sell it but you know local conditions better than I do. You don't have to live there but if your name is on the mortgage you have to pay on it until you transfer or sell it. Sure you could walk away and let the bank foreclose doing permanent damage to your credit. You could also file for bankruptcy. Don't take either of those courses until you find out the real cost of doing so. there is no guarantee your living expenses will be any less, and a real possibility of heading deeper into expenses and commitments.

investigate the possibility of renting part of the house, or of inviting other family members to live with you and pay rent or share expense.

Whatever your legal obligations are, these are also your moral obligations. Whatever legal options are open to you, are also possible moral choices.

She can't sell it because she wouldn't be able to get a price that would pay off the mortgage.