Arizona Professor Tells Underwater Mortgage Holders to Walk Away
The latest act of civil disobedience surrounding the housing crisis involves a University of Arizona professor who is advising homeowners that they should walk away from their home if it’s underwater.
According to the LA Times, University of Arizona law school professor Brent T. White has published an academic paper titled, “Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis.” In it, he says people could save “…hundreds of thousands of dollars that they “have no reasonable prospect of recouping” in the years ahead. Plus the penalties are nowhere near as painful or long-lasting as they might assume.”
His theory is that people should not throw good money at bad and due to shame and embarrassment of foreclosure, their emotions control them, where in fact, it’s probably the best thing to do in the long term financially.
But, before you walk, he encourages people to plan ahead: “Buy all the major items they’ll need for the next couple of years — a new car, even a new house — just before they pull the plug on their current mortgage lender.”
Pretty audacious advice! This tops last year’s “produce the note” movement, which encouraged people at risk of foreclosure to buy time by demanding the lender prove they have control of the mortgage note.