More From Professor Brent White on Strategic Default

Go here to read his articles in full.

Take This House and Shove It: The Emotional Drivers of Strategic Default
Brent T. White
University of Arizona – James E. Rogers College of Law

May 14, 2010

Arizona Legal Studies Discussion Paper No. 10-17
Abstract:     
An increasingly influential view is that strategic defaulters make a rational choice to default because they have substantial negative equity. This article, which is based upon the personal accounts of over 350 individuals, argues that this depiction of strategic defaulters as rational actors is woefully incomplete. Negative equity alone does not drive many strategic defaulters’ decisions to intentionally stop paying their mortgages. Rather, their decisions to default are driven primarily by emotion – typically anxiety and hopelessness about their financial futures and anger at their lenders’ and the government’s unwillingness to help. If the government and the mortgage industry wish to stem the tide of strategic default, they must address these emotions.

The Morality of Strategic Default
Brent T. White
University of Arizona – James E. Rogers College of Law

May 22, 2010

Arizona Legal Studies Discussion Paper No. 10-15
Abstract:     
Responding to those who argue that homeowners who strategically default on their mortgages are immoral and socially irresponsible, this article argues that breaching a mortgage contract is not only morally acceptable, it may be the most responsible course of action when necessary to fulfill more important obligations to one’s family.

Keywords: mortgage, strategic default, contracts, ethics

Suggested Citation

White, Brent T., The Morality of Strategic Default (May 22, 2010). Arizona Legal Studies Discussion Paper No. 10-15. Available at SSRN: http://ssrn.com/abstract=1597835

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