I read an article in the Hartford Courant yesterday about “intentional foreclosures” which they estimate to be about 26% of all foreclosures nowadays.

In the “intentional foreclosure”  the owner does not suffer a hardship and is able to keep up with the mortgage payments, however he/she decides to walk away and let the property foreclose anyway – generally due to the fact that that there is significant negative equity in the property.  

There’s a lot of uproar about whether intentional foreclosure is morally reprehensible, or whether it is simply a sound financial decision, much like dumping some depreciating stocks. You could really make an argument for each side.

However – I will say this has been a long time coming. Wasn’t it only a matter of time before those folks who responsibly make their payments on time every month just got fed up?Aren’t they really the only ones bearing the brunt of the fallout, by continuing to stay in their overleveraged homes, making the payments at whatever rate they signed up for years ago?

You could  commend them for  sticking by their commitments, but really – how long will it take some of these folks to regain the value lost in their homes? How does it feel to see the rest of the world being bailed out,  and for what? For making bad financial decisions? Banks are getting billions due to their irresponsible lending, and homeowners that default are offered new loans at better rates by their own lenders. Many more defaulting homeowners everywhere are leaving their troubles behind, letting their homes  foreclose and moving on  - further dragging down neighborhood values for those who decide to stay and “do the right thing”.

Wasn’t it only a matter of time  until those that meant well just decided to scrap it, take the credit hit and walk away from their bad “investments” as well?