Question: Upside Down Mortgage

Article:  May a borrower return the title of a property to the lender and end his obligations?

On the contrary, it would seem that the borrower would be obligated to return the amount owed.  The borrower was not lent the property.  He was was lent the money.  To refuse to return the money would violate a trust between borrower and lender.  By violating this trust, one sins against his neighbor.  In as much as the borrower is able, he is obligated to repay.

I answer that the lender has been paid in full.  The lending of money is an act of charity, and the refusal to repay is indeed contrary to the charity shown.  The pledge of money for fecund goods however is an investment.  For an investment to be licit, each party must accept risk.  This risk needn’t be equal, and in fact can be disproportionate.  In the case of a mortgage, the lender-investor accepts rents as interest payments.  Through the mutual investment, the lender has a first right to rents and the borrower has the right to any additional rents.  As such the borrower accepts the risk that the land will not yield additional rents, and the lender accepts the lesser risk that the borrower will surrender his right to further rents.  Since that which is lent is the right to rents, once the right has been returned, the lender has been restored.