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1) Anyone who bought a house is just as guilty of precipitating the crisis as the banks...

This is true to a degree. But remember that banks and real estate investors are expected to be much more knowledgeable and sophisticated players in the market than someone buying one house as a primary residence.

Similarly, the societal norms when hiring a web designer are different from the norms when dealing with a waiter. You tip your waiter, you don't tip your web designer.

I am a DBA, not a web designer, but I have gotten bonuses above and beyond the agreed upon minimum in both full time and contract work. This is very similar to a tip and often they arrive at the number in a similar way (a percentage with percentage based loosely on their evaluation of my performance).

Also, it is worth noting that the tradition of tipping came from a desire to secure exemplary services. Personally, I consider it quite ethical to not tip if the service is subpar and I will tip generously if it is better than I expected.

> The societal norms in b2b deals are different than in home mortgages.

Yes, but they shouldn't be, and many people are starting to figure this out. When the bank loaned you the money, they knew they were taking a risk and they get the home as collateral. There's no reason not to walk out on a deal gone bad just like any business would. The idea that it's immoral to foreclose is simply absurd, it isn't breaking the contract, it's exercising the out clause of it, and for that the bank will get the property.

The fact that you are not breaking a contract does not make the act moral. Again, is it moral for me not to tip even if the service is good (something I have no contractual obligation to do)?

It's fully moral to have a society where no one tips. Prices would be 15-20% higher, waiters would get a higher hourly wage, and it would be fully moral not to tip. That does not make it moral not to tip (when appropriate) in our society.

It would be fully moral to have a society in which mortgages are treated as call options on a house owned by the bank. Interest rates/prices would be higher, banks would fully expecting strategic default whenever it became reasonable to do so, and strategic default would be fully moral. That does not make it moral to treat mortgages as call options in our society.

Social norms matter, and it is indeed immoral to take advantage of people who reasonably assume you will behave according to established norms.

> Social norms matter, and it is indeed immoral to take advantage of people who reasonably assume you will behave according to established norms.

You are not taking advantage of the bank anymore than they're taking advantage of you. They knew up front that you might default, penalties are in the contract.

It's not immoral, it's business. That most people have been hoodwinked into thinking it's immoral benefits the bank, so they're happy to feed that delusion, but it is a delusion.

So it's immoral not to follow societal norms? Is it immoral to have a pink mohawk?

I think you're right that there can be implicit agreements in place such as the agreement to tip your waiter. The waiter example is quite different because you've made an implicit agreement. The point of a contract is to leave nothing implicit.

Also, part of the confusion here is that there is no precedence to say what the societal norm is. Housing prices have never fallen this much before in our society.

I really don't think there's an "established social norm" that you're expected to suffer a loss of hundreds of thousands of dollars when you don't legally have to. In a normal housing market, people pay their mortgages not because it's the moral thing to do, but because if they don't they'll lose the house and have their credit trashed. Only recently have banks made large numbers of loans where those deterrents are insufficient. It seems perfectly reasonable that since both the banks and the homebuyers made foolish decisions, they should share the pain.

A bit off-topic, but I don't see how tipping waiters turned into an ethics issue. A tip is for good service (originally, anyway). Now it's an entitlement. I would much prefer the restaurant owner to actually pay a real wage and charge me for it up-front, rather than a hidden social obligation on the back end.