Shame stops homeowners from defaulting

TUCSON, Nov. 6 (UPI) -- A University of Arizona researcher says feelings of fear, guilt and shame can stop a U.S. homeowner from defaulting on a mortgage.

University of Arizona associate professor of law Brent T. White details U.S. homeowners' moral dilemma in his article, "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis," the university said in a release Friday.

The James E. Rogers College of Law professor said lenders use feelings of shame and fear to ensure homeowners consistently make mortgage payments, even when they should simply default.

"These emotional constraints are deliberately cultivated by the government and lenders who self-servingly tell borrowers that they have a moral and social obligation to pay their underwater mortgages," White said.

White, whose article is being published in the November issue of Arizona Legal Studies, said fear comes into play as homeowners are threatened with financial drawbacks should they default.

"Moreover, as a way of enforcing the double moral standard, lenders hold borrowers' credit scores as collateral and will trash it in retaliation for the borrower's exercise of their contractual option to default," he said.