Strategic Default: Immoral or Not?

BY Paul Solman and elizabeth shell  January 7, 2011 at 10:53 AM EDT

Rounding out our series today, those of you considering strategic default might find particular encouragement from the web chat with law professor Brent White of the University of Arizona, who thinks it is both legally and morally okay.

Making Sense

“It’s interesting that [for] banks, the typical line is that it’s immoral to default on mortgages, yet banks do it themselves with quite a regularity,” White said.


If you missed the first two installments in the series, watch arguments against strategic default (and for sticking with your mortgage) by Florida banker Bill Valenti and University of Chicago Economist Luigi Zingales.

So, after all this, what do you think? Please let us know in a comment below.

(If you so love this debate that you can’t get enough, Zingales and White have duked it out on the pages of the urban policy magazine, “City Journal.” Zingales’s article is “The Menace of Strategic Default.” It prompted this response from White, and a counter from Zingales.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions _Follow Paul on Twitter._