Are strategic defaults morally acceptable yet?

Sunday night, 60 Minutes featured an interesting piece featuring homeowners who were walking away from their mortgage obligations (who could otherwise pay) because they were underwater. Conventionally, these people would simply be considered to be “bums” and “deadbeats,” but at what point does a rational decision, based not on societal notions of responsibility, become acceptable? Well, it appears that now is the time.

We all have seen strategic defaulters and there are definitely some mixed feelings toward what they are doing. It should, however, be noted that it has been a standard practice in the business world for years. The most massive and eye-watering example was the recent decision by BlackRock to turn Stuyvesant Town and Peter Cooper Village over to creditors.

Roger Lowenstein wrote in January in the NYTimes Magazine that homeowners are supposed to be held to a higher moral standard:

… the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry as well as government officials. Former Treasury Secretary Henry M. Paulson Jr. declared that “any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator — and one who is not honoring his obligation.”