Follow Us: Google+
 
Bankrate.com

mortgage

Does it pay to play by the rules?

"The reason to do the right thing is simply because it is the right thing to do," says Weinstein, author of "Life Principles: Feeling Good by Doing Good."

Weinstein -- a professional ethicist known by the moniker "The Ethics Guy" -- says individuals should not adjust their moral principles simply for financial gain.

"If it is wrong, for example, to run up a huge personal debt without having the means for paying it off, then it's still wrong even if 100 or 100,000 other people are doing it," he says.

As our parents tirelessly explained, moral rules exist for a reason.

"Imagine what our society would become if we created moral rules not on the basis of their inherent rightness or wrongness but by how a lot of people actually behave," he says. "By this line of reasoning, we would have to say that lying, cheating and stealing are ethically permissible or even laudable. This, of course, is ridiculous."

For her part, Day argues that bailouts don't reward irresponsible behavior as much as people think. A mortgage modification is nothing to covet, even for profit, she says.

“The reason to do the right thing is simply because it is the right thing to do.”

"It is no picnic to get in line to seek a loan modification," she says.

Day insists that homeowners who receive a loan modification are "not being bailed out." Instead, they are receiving a new mortgage rate they can afford.

"They're not even going to be given the rate they should have been given; they're just going to be given rates they can afford, which may or may not still be more expensive than they should be," she says.

In addition, a mortgage modification comes with a heavy price for borrowers in that it is likely to hurt their credit, she says.

"You don't want to ruin your credit rating and then be subject to real loan sharks," Day says. "That is not a bargain."

However, Schiff insists the advent of Bailout Nation increases "moral hazard," the concept that ignoring -- or worse, bailing out -- bad behavior only serves to encourage it in the future.

That sends a dangerous signal to people who have played by the rules in the past, Schiff says.

"What the government is saying with the bailout is, 'be irresponsible, be reckless, and you'll get rewarded; be responsible, and you get punished because you'll have to pay for all the irresponsibility of everyone else,'" he says.

"You can't have a society like that. It won't work."

advertisement

Show Bankrate's community sharing policy
            Connect with us
Compare Mortgage Rates
Zip code:
Product:



advertisement
Most Read
  1. Beach towns with bargain homes
  2. 6 tips for successful yard sale
  3. Nick Nolte's house for sale
  4. 5 costliest tickets for car insurance
  5. 7 sedans for the young at heart
  6. 5 car models that lose value
  7. Ali Landry's house for sale
  8. Headlight requirements by state
  9. 9 gas-only, fuel-efficient cars
  10. 8 eerie ghost towns
Mortgage Overnight Averages
Product Rate +/- Last week
30 yr fixed mtg
3.77% 3.60%
15 yr fixed mtg
2.88% 2.74%
5/1 ARM
2.66% 2.54%
30 yr fixed mtg refi
3.76% 3.58%
View rates in your area:
 

Feeling lost in the mortgage wilderness?

Let Bankrate's Mortgage Analysis be your GPS. This newsletter tracks our exclusive mortgage features, rates and tools. Delivered Thursdays.
 
advertisement
Another indicator of an improving housing market: Realtor income is up.
Partner Center
advertisement

Advertising Disclosure: Bankrate.com is an independent, advertising-supported comparison service. Bankrate may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website.