What would you think of somebody who took out a loan, used something valuable as collateral, and when the collateral dropped in value by the time the loan was due, refused to pay the loan and made the borrower take the less valuable collateral? Assume the borrower had the money to pay the loan, but just chose not to pay. Perhaps the first thought that came to your mind upon hearing that description was the horror that greeted the suggestion that underwater homeowners who were struggling to pay their mortgages should just walk away, and tell the bank to just keep the house. How immoral! How irresponsible! In some places, even illegal! You can’t just walk away from a debt, come on. Continue Reading