While SOME banks may have contributed to the mess, they didn't cause it. And, many banks neither caused it nor contributed to it. The cause was ultimately bad public policy compounded over the years. It was the politicians (from both parties) who caused the problem by encouraging and sometimes mandating bad behavior.
However, the value of the property and the obligation to repay the loan are two completely separate and unrelated issues. If you sign for a mortgage and the property value drops to zero, that has absolutely no impact on your obligation to repay the loan, on time, and in full. To do otherwise demonstrates a complete lack of YOUR integrity, and not the bank. At some point, the property value will rebound. If you're buying a house as an "investment" rather than a required place to live, you're risking that investment going underwater, just like any other investment. That risk is and should be entirely held by the home buyer.
Furthermore, failing to repay the loan while continuing to live in the house is essentially theft. I'd have a hard time EVER doing business with someone (including hiring them, OR continuing to keep them employed) who decided that their promise to repay a loan is null and void, just because it isn't presently in their financial best interest. Their word only goes as far as they deem it to be in their own self interest. A dishonorable and certainly untrustworthy person, indeed.
Interesting that he continues to pay the condo fee, likely because the condo association would take him to court in an instant, and he knows that the bank will probably take a while to sift through the paperwork to get to him. Good luck getting the next loan.
JKG
