I've often wondered whether the breakdown of bankruptcies in Utah into religious statistics would match the Utah religious demographic. In other words, if 60% of Utahns are LDS, do 60% of bankruptcies in Utah involve LDS people? I suspect, but have no evidence for it, that the ratio of Mormons in bankruptcies is higher than the general demographic.
Now, along comes another statistic that has to worry us--mortgage fraud.
For subprime loans, Utah ranked second nationally in fraud levels, up from No. 3 in 2005.
The most common type of fraud is to claim that a purchased home will be the owner's primary residence in order to get a better interest rate from their lender.
Why do I think (again without proof) that LDS people might be disproportionately involved in such fraud? How can LDS people specifically justify committing such fraud? Here's my theory: in many cases it is a perverse misunderstanding of the counsel of church leaders to stay out of debt.
First of all, the Book of Mormon teaches that when people are righteous that they will be prosperous. It's easy (although incorrect) to turn this around and assume that if we are prosperous, we must be righteous. (I suspect that some people go even further by putting up the appearance of prosperity--getting more into debt than they should--in order to have the appearance of righteousness.)
Second of all, investments can help us get out of debt if they go well. However, many people jump on the investment bandwagon when they clearly do not have the means to do so. For most people, investments should be of the safer variety--savings accounts, certificates of deposit, etc. But people's impatience for getting out of debt gets the best of them, and ultimately several of them are mired in debt when a too-risky investment goes sour.
A friend of ours illustrated the Mormon thrift mentality during a white elephant gift party we attended a few years ago. After "stealing" a relatively expensive gift for the second time, against the rules of our white elephant party she declared that it could not be stolen for a third time (three steals was the rule we had established.) It was embarrassing to see her defiance, so we ultimately chose to ignore it, let her keep the gift, and continue the game as though nothing untoward had happened. At that point, her defiance turned to feelings of victory, because she had made the most out of her white elephant investment.
Staying out of debt is important. Getting out of debt by immoral means and giving the appearance of being out of debt are train wrecks waiting to happen.