The Morality of Strategic Default
Webcast Q&A: Sunday, 10 July 2011, Question 2
I answered a question on the morality of strategic default on Philosophy in Action Radio on 10 July 2011. You can listen to or download the podcast segment below – or check out the whole episode.
Is it moral to strategically default on your mortgage? Suppose that you could continue to pay your mortgage, but you're underwater: you owe more than the house is worth. You realize that you'd save tens of thousands of dollars by defaulting. Would it be morally wrong to default, assuming that you don't engage in any fraud or other dishonesty in doing so? Would it make a difference if you do that in today's highly regulated market versus in a fully free market?
My Answer, In Brief: Strategic default is morally wrong: it's dishonest and unjust. It's your job in life to ensure that you borrow money sensibly and then repay those loans.
- Duration: 20:57
- Download: MP3 Segment (7.2 MB)
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- Should We Care if People Don't Pay Their Debts? and Is It Okay to Steal From Macy's? by Megan McArdle
- Yes, It's Okay To Walk Away From Your Mortgage and Should You Consider a 'Strategic Default' on Your Mortgage?
- On Bankruptcy at Cornell University's Legal Information Institute; Bankruptcy Exemptions: You Don't Lose Everything and Bankruptcy in Colorado at Lawyers.com; and On Chapter 13 Bankruptcy at the US Courts
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About Philosophy in Action Radio
I'm Dr. Diana Hsieh. I'm a philosopher specializing the application of rational principles to the challenges of real life. I received my Ph.D in philosophy from the University of Colorado at Boulder in 2009. My dissertation defended moral responsibility and moral judgment against the doubts raised by Thomas Nagel's "problem of moral luck."
My radio show, Philosophy in Action Radio, broadcasts live over the internet on Sunday mornings and Wednesday evenings. On Sunday mornings, I answer four meaty questions applying rational principles to the challenges of real life in a live hour-long show. Greg Perkins of Objectivist Answers co-hosts the show. On Wednesday evenings, I interview an expert guest about a topic of practical importance.
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