Law Professors

Law Prof’s Book Helps Underwater Homeowners Decide When to Walk Away

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A University of Arizona law professor offers advice to underwater homeowners in a new book that echoes his earlier views that walking away from a mortgage may be the best alternative.

The professor, Brent White, says homeowners need to evaluate financial and practical concerns before making a decision, according to the Wall Street Journal Developments blog. Questions include: Can your bank go after your assets? Will your credit score suffer? How much will be saved by renting? His book is called Underwater Home: What Should You Do if You Owe More on Your Home than It’s Worth?

Taking up the moral issue, White says homeowners have paid a higher price for the real estate downturn than government or lenders, according to the blog account. It’s not the homeowner’s fault, he argues, if the lender miscalculated the risk of default.

“I think it‘s OK to stop paying the mortgage long before you clean out your savings, sacrifice your retirement, spend your children‘s college fund, and certainly before you have to start using your credit cards to survive,” he writes. “Indeed, I think it‘s morally acceptable to default if your mortgage threatens your ability to save adequately for the future, regardless of whether you can pay it according to some arbitrary definition of ‘affordability.’ ”

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