“Ma’am, I think the answer is quite clear: what you should do is _________________.”
I learned somewhere along the way in an Ethics class in college that anytime you use the word should it could be considered a normative statement. Normative statements are often used to describe what we as a society generally accept as social norms – or maybe even what we could consider to be ethical.
And with that brief review of the word should and the concept of normative statements and ethics… consider a conversation I had this week that is virtually the same daily conversation I have had with hundreds of people over the last couple of years relating to individual housing situation difficulties.
From the inbox:
If I’m upside down in my house, is there no way to get out of the house without damaging my credit? What about selling for what I can and having an unsecured loan for the balance of the mortgage? I’ve heard of that in other places, is that not an option in AZ? Thanks.
It is up to your current lender. I haven’t heard of it being done, but I can say that anything is possible in today’s world and it would be up to your lender. At some point, it is probably just an individual decision of “is it worth $X to preserve my credit score?” And obviously there are many factors that go into that decision such as how much the note would be for, how much your credit score matters to you, etc.
To which came his reply:
Besides trying to maintain my credit score it’s about keeping a contract I signed when taking out the mortgage, saying I would pay this back. Also by sticking to my commitments I would avoid the evil of falling behind on payments (which I understand is necessary to do a short sale) and the calls and harassment of people wanting the money I owe them. So how much is that worth?
I sat back and scratched my head and thought to myself “So how much is that worth?”
I don’t know.
But I know that many people are finding that they are in a situation where there are shades of grey as to what they should do. Here is my best advice to anyone who finds that they are in a situation where a real estate transaction goes into that grey area that can be called ethics, norms, social norms, etc. it might not be a bad idea to start by asking yourself these questions ( in no particular order of course):
- Is it legal?
- Is there anything I can do to appease all parties involved?
- What does my spouse think?
- Is it against my religious beliefs?
- If my choice became public information would I be embarrassed by it?
And then — after you have considered all of these and maybe one or two that I forgot to mention… you are going to have to make your own decision as to what is best for you and your family.
Otherwise, you will probably have a tough time drowning out all of the conflicting voices of other people’s opinions of what you should do.
About the Author: Justin McHood is a mortgage broker with VanDyk Mortgage Corporation. You can find him at Arizona Mortgage Team, on the Zillow’s Mortgages Unzipped Blog, and at most East Valley Friday Nights gatherings. He’s the one in the blue shirt.