This Guy Is A Criminal
This guy in Ohio, Terry Hoskins, has been in a long running court battle with his brother over a business. Along the way, Terry failed to pay his taxes and the IRS put liens on his business. It appears that the IRS is seizing his business and putting it up for auction. The bank, attempting to recoup some of the funds they loaned Terry for his business has decided to foreclose on his house. Terry makes it sound like he did not pledge his house as collateral for those loans, but I'm guessing he did.
Terry bulldozed his house to the ground to send a message to the banks that were foreclosing on him. The message appears to me to be, "I am a crybaby loser that doesn't like to pay my debts, If you loan me money in the future, I can not be trusted to pay it back."
Disturbingly, this trend appears to be taking hold in America today. Here is a CNN article in 2008 describing people walking away from their mortgages. Here is a recent New York Times Article putting forth an argument for walking away from a mortgage...
I can understand someone walking away in a situation where there was fraud on the part of the mortgage company, there was a lot of that apparently going around right before the bubble burst, I can even see someone walking away if there was a medical issue or job loss. Apparently, there are people out there, who have the money to pay their mortgage but their house has lost value and they would rather walk away from their mortgage than pay it, so called "Strategic Defaults". I have a hard time understanding an adult, signing his/her name on a contract, and then reneging. This person wanted money from a bank so they signed a document stating they would pay the bank back. I've mostly bought new cars and they depreciate the second they leave the lot, I don't abandon them just because they've lost value. I just don't get it.
What happens going forward when people cannot be trusted to pay back a loan on a massive scale? Are there any consequences other than tighter lending standards and higher costs to borrow?