[patio11]

There is a clause in all of my software licenses that offers a refund, no questions asked. I am able to offer that clause in the faith that people will use it responsibly. If folks exercised it routinely on the theory "Hey, he lets me do it and that puts $30 in my pocket", I'd have to snip it or go out of business.

The extraordinarily lenient treatment of foreclosures, particularly in California, is also premised on them being rare events caused by black swans like personal financial catastrophe. If folks use them merely when they're net beneficial, the generous leniency afforded folks in personal catastrophe will not be extended next time.

Banks understand this. This is why, when they write contracts between each other, defaults do not result in "Oh, sure, keep the property for another twelve months and then mail the keys in and we're even stevens."

[robrenaud]

At first, I thought your argument was really compelling. But I think your analogy fails. You are implicitly equating taking a mortgage, not repaying it and continually living your home with buying your program, getting the refund, and continually using the program.

If you could remove the users ability to use the software when you refunded them $30, like the mortgage lender can when the homeowner stops living in it, you'd probably still be in business even with your clause.

On the other hand, if all of your users bought your software, thought it sucked and never used it again, and then got their refund, well, you should probably be out of business.

The OP's situation is not analogous. He is not free riding.

Edit: On the other hand, the year's worth of free rent before being evicted is to me a bit morally shady.

[patio11]

But he does get to stay in the house (for a year), because of the implicit assumption that knocking him out on his hindquarters when he stops paying would be discompassionate in the face of the catastrophe which caused his default.

As an aside: I do a functional-limited trial rather than a time-limited trial precisely because 100% of the use of the software for 48 hours satisfies the need for 95% of my customers. "First year free" would wreck my business pretty comprehensively if folks took advantage of it.

[istari]

Him getting to stay in the house for a year is due to the lengthy foreclosure process, a legal artifact, not due to any compassion on the bank's part.

I'm confused why you're using the word "compassion" at all, and coaching your argument in terms of how "compassionate" banks will be in their terms next time around.

Banks exist to make money, the terms they offer are a balance of how much risk they are willing to take, how much return they can earn, government regulation, and competition.

The OP does not owe the banks anything other than the terms of his contract, and the terms say that if he doesn't pay his mortgage he'll lose his house.

[roc]

Apples and Oranges.

A foreclosed house still has value and can be resold. The bank also retains all the mortgage payments made prior to foreclosure.

They can only lose their hat on a foreclosure if the home was overvalued. It's their responsibility to assess the property. I don't see why they get let off the social hook for playing fast and loose, yet we're expected to hold the lendee's feet to the fire for doing the same.

> "the generous leniency afforded folks in personal catastrophe will not be extended next time." What generous leniency from the other party? What leniency exists are legal/regulatory terms known to the bank before they signed the contract. If those terms increased their risk, it would be naive to assume they didn't increase their rates to cover the difference.

Further, don't misunderstand the huge glut of shadow inventory for compassion. The banks are simply dragging their feet to avoid admitting their losses.

[earl]

You clearly have no idea what you're talking about.

First of all, the "extraordinarily lenient" treatment is nothing like lenient if you happen to have a second mortgage, which was pretty common during the crisis.

Second, banks can and do write contracts like that and have defaulted on them by returning the collateral and forfeiting their investment. There are tons of examples of banks doing just this that two seconds with google would have found for you.

Third, this punishment of banks by foreclosure is exactly the point. Socially, we do not want banks making loans that will not most likely be repaid; that's what leads to financial crises as we are currently experiencing with negative knockon effects expected to (optimistically) hinder the economy for 10 years.

Fourth, the banks were asked by the government, and by good conscience, to make a fair deal with homeowners. The government is subsidizing taking the loss on the mortgage and reducing the principle to something reflecting reality. For various reasons, banks are choosing not do to this. Foreclosure is the proper response.