Originally Posted by
Carl Spackler
OK, here's Mr. Hardass again. In the theoretical example I've bolded above, that means a pilot would have bought a 500,000 home (since most areas have dropped by 50%). If a pilot who was in a position to be furloughed paid 500,000 for a home, that is HIS problem and his societal DUTY to pay it back. Notwithstanding the unbelievably poor judgment that shows, he has a duty to pay that back.
I do a bit of hiring and firing in my firm and in the firms I consult. We ALWAYS check credit history. This is exactly the kind of moral hazard and poor judgment we look for to weed out potential new employees. I know it sounds harsh because these people need jobs to dig themselves out of their self-induced financial crisis, but nobody wants to risk someone who shows such poor personal judgment and lack of moral character.
Carl
First, I agree with about 99% of what you're saying here on fiscal and contractual responsibility.
I appreciate the point you're making above with this example (which happens to be me), and agree with your point also. However, while I agree with the point, couldn't let some of the assumptions pass which turn out to not be valid (though reasonable), since you're talking about ME
1. House values in my area dropped 60% (southwest)
2. House was $450kish, which was an average house/price at the time, and I was constrained to buy it due to job/family/move needs. Of course I wish I'd rented and bought 3 years later but who knew...
3. You'll note I AM still in my house and paying it back... although I own flat out several houses of the same floor-plan and could have walked into one of them down the street. So I don't think there is any "moral hazard" here, in fact I'm about the only guy I know in my situation who hasn't walked into a "backup house" if they owned one (your moral decay point is true).
4. I also do credit checks and interviews, about 15-20 per month, to determine rental risk, work ethic, and judgment; and like you I weed out exactly the same factors. However, in this case I am not one of those, despite being $250k upside down, as I have 810-830 credit scores, and operate several businesses as it appears you do, and am well able to withstand loss of Delta income.
Your points all remain valid and I agree with them, your assumptions were reasonable (but incorrect due to lack of info about my personal finances), but I can't let you get away with calling me "someone who shows such poor personal judgment and lack of moral character", even by mistake.