“Mortgages aren’t ethical documents, they’re legal contracts. The typical residential mortgage for an owner-occupied home gives the borrower 2 options: pay on time and in full, and keep paper title to the house and full entitlements to any appreciation upon its later sale after the mortgage is satisfied; or stop making payments, and hand the keys back to the lender.
“Morality and ethics don't even enter the equation. Both options are perfectly legal for the borrower, and the only criteria should be business-based. All the ethics you need are contained within the 4 corners of the pages of the mortgage contract.
“Indeed, the ethical thing to do is for each borrower who’s underwater to look without blinders at their family's financial situation -- not just now, but over the long term."
From Mike Shedlock in Minyanville.
A Tishman Speyer-led partnership is in default on debt tied to a large office portfolio in the Washington area. Tishman itself isn't at risk. 8/19/09 Wall Street Journal
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