Learning To Walk: Fear, Shame And Your Underwater Mortgage

Learning To Walk: Fear, Shame And Your Underwater Mortgage: "'We encourage people to work hard, get an education and strive for things. But, when there's a bump along the way and we need a helping hand for a short time, we're spit at without any support,' he said. 'For a country that touts its devout following of Christianity -- which is rooted in the teachings of a Jesus who said to love thy neighbor and help thy brother and sister -- it was really a fun lesson in hypocrisy.'"

..."the federal government, particularly through its highly-touted, and largely ineffective, Home Affordable Mortgage Program, or HAMP... may have been more helpful to banks than to homeowners.

A group of senior Treasury officials, which included Secretary Tim Geithner, admitted as much to financial bloggers at a meeting this summer. 'Officials pointed out that what may have been an agonizing process for individuals was a useful palliative for the system as a whole,' wrote one blogger of the meeting. 'Even if most HAMP applicants ultimately default, the program prevented an outbreak of foreclosures exactly when the system could have handled it least...The program was successful in the sense that it kept the patient alive until it had begun to heal. And the patient of this metaphor was not a struggling homeowner, but the financial system, a.k.a. the banks.'"

..."CNBC anchor and noted oligarch Larry Kudlow articulated the mainstream position against strategic defaulters in a May column on CNBC.com. 'Just because a home loan is 'underwater' -- meaning its value is lower than today's current market price -- why should a responsible person whine about it and walk away?' Kudlow wrote. 'Why not service this loan for the longer term and wait for prices to improve? That's called personal responsibility.'

This is in keeping with received wisdom about the evils of foreclosure."

...Peter Fredman, a foreclosure defense attorney in California, said "'Ironically, a lot of people who feel that special obligation [to pay a mortgage] are the people in the worst position; Upper-class people, they have no problem with what's going on. They have bigger considerations.'

Fredman's website puts it like this: 'From the institutional lenders' point of view, you should eat cat food and take your kids out of school before you stop making your mortgage payment. But that is because institutional lenders don't eat or have kids. They are fictitious entities, constitutionally dedicated solely to the pursuit of money. Repaying your debts may be a matter of personal integrity that you may or may not be able to afford. But you have no moral obligation [to] the financial institutions because they do not operate in a moral universe.'"