Your solutions…

You are right in that signed mortgage papers indicate an agreement to pay the mortgage loan and a default by the borrower can legally allow the lender to seize all assets of the borrower. Does it reflect on moral character? – I believe it does. Saying that, there are circumstances where a person(s) become unable to repay. In those cases, communication is a necessity for the lender and borrower to reach an equitable solution. Lenders normally do not like to repossess as it causes additional paperwork and time to liquidate those repossessions. By using guide lines for lending, the risk of non-payment is greatly reduced. Thus, a choice can be made as to the character issue.

No to all the above. You took out a contract. They gave you something, you need to do your side of the contract. In this case they gave you the money for the house, you in return need to pay back the money they let you borrow, plus interest.

As far as it being moral obligation, I don’t think so. I think if most people could pay their mortgage they would, so morally they are trying. Right now is just a real hard time for people.

YES. ONE made an agreement, made promises to pay, gave one’s word, signed, signifying agreement to terms, became legally obliged.

There are natural consequences to one’s actions. And one is that being “let off the hook” for one’s legal debts may result in a 1099 issued, which impacts the tax return for the year with additional income.

One always has a moral obligation to make amends.