NBC: Screw Your Neighbors -- Walking Away from Your Mortgage is 'Ethical,' 'Good Business Decision'

April 20th, 2010 2:45 PM

Surprise: NBC finally found a business it likes - even a business decision it likes: companies that help homeowners who decide to walk away from their mortgages.

"New figures show foreclosures in the U.S. are up about 35-percent from a year ago," Matt Lauer kicked off an April 20 segment of "Today" that encouraged homeowners - even those financially comfortable - to simply walk away. "And a growing reason why are people who simply choose to walk away from their mortgage even when they can afford it."

"Experian, the credit-monitoring service, says 588,000 borrowers - or 18-percent of those who have defaulted on their mortgages in the past year - did it for strategic reasons and not because they're broke," NBC's George Lewis reported. "It's called a strategic default, walking away from a home and enduring foreclosure out of frustration with a bad investment."

On the scene with the Schreur family in Folsom, California, Mr. Schreur acknowledged in an interview that although his family was not in any financial distress, a sharp decline in house value incited the family to default, as any other option "made no sense."   

NBC didn't just champion financial irresponsibility, it gave viewers a resource to help them practice it, giving generous air time to "You Walk Away," a company dedicated in helping thousands walk away from their mortgage, generous advertisement. (ABC's "Good Morning America" did the same back in February.)

"One bit of advice? Don't feel guilty," Lewis stated.

"People have this misperception that people who walk away are doing something unethical," Chad Ruyle, a co-founder of the company said. "To me, they're making a good ethical decision because they're taking care of themselves and their family and it's a business decision."

"Today" did give some brief time to John Courson, President of the Mortgage Bankers Association, who urged homeowners to refrain from strategic defaults.

"What does that do to other properties and the value of your neighborhood? The consequences are dire," Courson said.

"While owning one's own home is still a large part of the American dream, many people who've walk away from their mortgages and are now renting say they found a certain peace of mind. The Schreur's say their strategic default left them feeling a lot better ... A feeling now shared by many in this country," Lewis closed.

In studios, Matt Lauer interviewed "Today" financial editor Jean Chatzky.

"There are people who say you made a deal, you have a commitment, you have a mortgage, it hurts your neighbors. Is that a fair argument?" Lauer asked.

Not to Chatzky. 

"It's an understandable argument, but I think when you look at the business case, it is just as understandable to walk away from a bank that lent you more than you could afford on a property that was not as valuable as both of you thought," said Chatzky.