Answer to Question #285230 in Management for 33aaa

Question

If homeowners made poor financial decisions—taking too much equity out of their houses or buying at the wrong time—do the predatory lending practices of the banks and mortgage companies justify walking away from those mortgages?

Answer 1

No, they are not justified to walk away from the mortgages. This is because despite the fact that banks or mortgage companies may have conducted or involved in predatory lending practices, this does guarantee them of walk away from the mortgages. They also have an increased likelihood of declaring bankruptcy, which in turn can lead to foreclosure or repossession of assets such as a vehicle.