Is Buying A Forclosed Home Immoral?

[The Joey-O]

I heard about forclosure auctions on a TV ad. It made me wonder if it would be immoral to buy a home that someone got booted out of. On the one hand, they didn't meet the terms of the agreement they entered into. On the other, they may have entered into a contractor that would be condered "predatory".

Regardless of the circumstances, I won't know what conditions caused that house to go into foreclosure, so would it be immoral to attempt to purchase one?

[Dismas]

[quote name='The Joey-O' post='1399196' date='Oct 7 2007, 11:54 PM']I heard about forclosure auctions on a TV ad. It made me wonder if it would be immoral to buy a home that someone got booted out of. On the one hand, they didn't meet the terms of the agreement they entered into. On the other, they may have entered into a contractor that would be condered "predatory".

Regardless of the circumstances, I won't know what conditions caused that house to go into foreclosure, so would it be immoral to attempt to purchase one?[/quote]

A foreclosure is rarely an act of profit for the lender. Sure, they might even had a predatory scheme, but a foreclosure is a backfire, and neither side wins. Generally, selling off a foreclosed home is the lender trying to recoup losses. You see, in the current housing situation, both the lenders and the buyers were making misjudgments a couple years ago, and are now suffering because of them.

[Maggyie]

I don't know if it's immoral or not, but I know I would feel bad doing it. Now, repossessed cars, not so much. But a house is usually somebody's home...

In some situations, though, the foreclosed homes are just houses bought by people who were trying to get rich quick in the real estate market. They never lived there, they were just planing to re-sell with big profits. In some neighborhoods in my area the "absentee" owners really let the houses go to pot. The neighbors really hope the houses get auctioned off to good people, quickly...

Edited October 8, 2007 by Maggie

[Mercy me]

I don't see why it would be immoral. Dismas is right. A foreclosure is usually a lose lose situation for both the buyer and the lender. If it would make you feel any better, often times the buyer will try to sell a house rather than get foreclosed on. You might look for those opportunities instead if you are looking to buy.

There are many steps involved in foreclosed and properties in foreclosure are easily found in the public records long before they are liquidated. I know that you didn't say that you are doing this but beware ofthe TV ads.

[N/A Gone]

It can be messy, but it is not immoral I think.

[Archaeology cat]

As someone who almost had to foreclose on my house, I don't see it as immoral. We had our house on the market for a year, and had someone not bought it when they did, we would have had to foreclose, as we couldn't keep up with payments on that and pay rent on where we live now (we'd had to move pretty quickly due to school). It wouldn't have been the lender booting us out, just how it would have worked. Anyway, just my opinion, but I see nothing immoral about it.

Edited October 8, 2007 by Archaeology cat

[Paddington]

Somebody is going to buy it at this point. Who will buy it and when are the only remaining details.

I think.

[prose]

One thing I saw on Suze Orman yesterday... The lender (usually a bank) actually does not lose when this happens. When a person takes out a mortgage, the bank actually sells of pieces of the mortgage to other companies. So banks, essentially, never lose.

I wouldn't think it was immoral at all.

[Andreas E.]

Many times, the high risk mortgages that are defaulting right now also came with mortgage insurance. This does not cover the homeowner, but the lender. The insurance will pay the balance if the mortgage defaults and the home is foreclosed for less than the outstanding balance on the mortgage.

I don't think it's immoral either. Yes it's a home, but when paying for that home becomes a burden, I can see how families would rather move to something more affordable than deal with the constant stress of worrying about how to make ends meet.

[The Joey-O]

[quote name='prose' post='1399365' date='Oct 8 2007, 12:13 PM']One thing I saw on Suze Orman yesterday... The lender (usually a bank) actually does not lose when this happens. When a person takes out a mortgage, the bank actually sells of pieces of the mortgage to other companies. So banks, essentially, never lose.

I wouldn't think it was immoral at all.[/quote]

Actually, the problem isn't as much with the banks as the companies that buy up the motgages from them. You see, a bank won't be able to sell off those companies think they're going to make money from the mortgages. A bank may not feel an immediate effect from foreclosing on loans, but if they have a high enough foreclosure rate, the companies will stop buying up those mortgages. Companies, usually, are smart about buying up those loans. They pay people lots of money to be good at it. However, what happened with the sub-prime market is an example of how this is not universally true. Basically, somewhere along the road one of those company stooges got the bright idea to invest in sub-prime mortgages as if they were standard-risk mortgages. The trend caught on and many companies started doing it. In the end, those companies took those risky stocks and sold them to consumers through mutual funds, etc. Consumers, not having the research capabilities that those corporations have, buy those mutual funds. The banks often times front those directly to consumers in the same way that those companies do, taking out the middle man. In these situations, it is the banks fault.

[hyperdulia again]

Is marrying a widow(er) immoral?

[Mercy me]

Nah go for it!

[Birgitta Noel]

[quote name='hyperdulia again' post='1399615' date='Oct 8 2007, 10:03 PM']Is marrying a widow(er) immoral?[/quote]

Only if you somehow intentionally contributed to the death of their spouse.

[CatherineM]

Some of the foreclosure situations that I saw in my practice were involving a divorce where one party was required to make payments on the house for the other party, where someone got into a house that had some structural problem, and walked away when they couldn't afford to fix it, where someone became disabled or lost their job, and where someone died. I had a methodist minister come to me once whose husband had lost his ministerial posting because of something that later turned out to be not his fault. They racked up a lot of bills before she was able to get a job. His reputation had been ruined, and basically had to go to work as a taxi driver. She believed that it would be a sin to file for bankruptcy. I told her that we fought a revolutionary war in part to get rid of things like debtor's prisons. Jesus allowed even the worst sinners to start again with a clean slate. The only thing that is immoral in finance is if you intentionally try to defraud someone, or out and out steal. Even in a regular sale there could be heartache behind the sale, a divorce, a death, etc. You can't know when your good fortune might be at someone's expense. Everytime you get a close parking space at the mall, you are denying someone else who might really need a close space, multiply that through your entire day. The most important thing is to find a good investment for your family, that is your first priority.

[Sister Rose Therese]

Houses forclose for some good and bad reasons. I have known of several occasions where the house had been used to grow pot. You could try to do a bit of research ahead of time to see if there were any funny circumstances, anything in the newspaper.