Isn’t Our Word Worth Anything Anymore?

I was listening to talk radio the other day as I was traveling to my home state of Indiana.

A caller said something like the following, “We bought this house.   We owe more on it than it is worth.   We are just going to give it back to the bank.”

I see this exact thought process happening across the nation, and it frustrates me greatly.

The core of the problem as I see it is this:

Something has happened to us – somebody is going to have to pay – it is NOT going to be us.

Isn’t our word worth anything to us anymore?   If I purchased a house that has dropped in value substantially, it does not change the fact that I gave the bank MY WORD that I would repay the money I borrowed!   MY WORD is not a flippant statement that I can reverse when it becomes inconvenient to me.   MY WORD is far more important to me than a few thousand bucks.

Other situations I see this happening rampantly … business contracts and marriage vows.

In the Word it states “Simply let your ‘Yes’ be ‘Yes,’ and your ‘No,’ ‘No'”.

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  1. Oregonsun on December 22, 2009 at 7:31 am

    Thanks for the article. My husband and I discussed this a while back. We see it in those we elect, co-workers and even family members. It is a sad statement on the condition of our country.

  2. justatron on December 22, 2009 at 8:38 am

    Exactly! My wife and I are dealing with financial issues related to her extended unemployment and we are planning on selling our house after Christmas and downsizing. My dad has been trying to get me to declare bankruptcy instead…but I just can’t justify it, financially or even morally. I ran up my debt and I feel that it is my responsibility to pay it off however I can, as long as I am able.

  3. Jim on December 22, 2009 at 5:57 pm

    Interesting perspective. Giving back a home because it’s a bad investment IS honoring the contract. The contract has ramifications for non-payment. One of those is foreclosure. The homeonwer is excercising his rights under the contract.

    The person that should pay is the banks and their sharholders. They made the bad deal. Your issuse should be with our elected leaders that have chosen to scocailize such losses.

  4. Todd Helmkamp on December 23, 2009 at 12:40 pm

    Jim, the fact remains that by signing a contract, the signer is agreeing to take on the debt and repay that amount. Foreclosure is a legal right granted to the lender in case the borrower defaults on the loan, which allows the lender to recover part of its loss. Foreclosure is not a “I made a mistake, now I can just quit” clause, even if that’s how many people are using it.

    I do agree with you on our elected leaders, however.

  5. Jeff Gibson on December 24, 2009 at 11:33 am

    But what about this situation: You buy a house. Three years later the house is worth half of what you paid, and you get transferred to another city. You can’t rent it for even close to what you pay monthly for it.

    Would you tell that person that they will have to pay to difference for the next 27 years, or until rents raise?

  6. chris on December 25, 2009 at 1:37 am

    I think the problem has many reasons for existing. But one root seems to be that leadership in business (and government) often tend to not keep their promises or do whats in the agreements they sign.

    For example, it’s not uncommon for many businesses to have an invoice from a supplier of goods or services that has terms of 2% 10, net 30. Meaning if you pay in 10 days or less, you can take a 2% discount. Otherwise you owe the whole amount in 30 days. Yet many large companies won’t pay the bill for 60-90 days and still take the 2% discount. The agreement was a 2% discount if paid in less than 10 days or to be paid in full in 30.

    The business section of the newspaper has story after story where business falls short of their obligations and agreements. Daily, especially during tough times, you will see a story about business walking away from their debts only to resturcture without the burden.

    Things like the above filter down into society. If leaders do it (and business is often looked at as leaders), then why can’t the little guy do it?

    I’m not saying two wrongs make a right. Nor am I saying all businesses are bad. But our leaders in business and their honest peers really need to examine how they are impacting morality and the value of the strength of our word.

  7. joe argo on January 1, 2010 at 8:19 am

    I agree, of course. We were among the millions who got caught trying to sell a house that was “under water”. For two years we faithfully paid the mortgage on the house that wouldn’t sell while also paying the mortgage on the new house we were living in. We never considered “walking away” because, to us, it would have been breaking our promise to pay.

    On the flip side, I can see where some people have fewer qualms with sticking it to the banks/mortgage servicers. Unlike an individual with whom we might have a contract or agreement, it was nearly IMPOSSIBLE for us to contact anyone at Citi Financial who might be able to help us modify our mortgage or even delay a payment. What we came to find out was our mortgage servicer had little or no financial incentive to work with us at all. If we defaulted, their insurance kicked in and they got paid in full. In short, despite our best efforts, and despite government pressure, after two years of trying, we never found anyone at our mortgage company who felt their role as lender meant he/she had a responsibility to treat us with respect. It would have been VERY easy for us to decide to walk away from themt after the way we were treated, and I bet there are hundreds of thousands of people who have had the same experience.

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