I mentioned this article from the New York Times in the midst of a very active comments section today, and it's already garnered a lot of reaction, but I wanted to dedicate a post to it.
The article is about how hundreds of thousands of people who bought homes have stopped paying their mortgage and are taking advantage of the fact that the banks are overwhelmed by continuing to live in these houses for free. They just stay there for years, abusing a system that ostensibly was created to prevent abuse by the banks.
The featured family in the article – – who, incredibly, gave their full names - consists of a couple (Alex Pemberton and Susan Reboryras) who stopped paying their mortgage last summer and Mr. Pemberton's mother who, having stopped paying two years ago, is setting the bar higher as an example for her son. Here's her picture; it's hard not to have your heartstrings tugged as you see the anguish of a woman who is unable to afford her mortgage payments:
Alex 'n' Susan, self-relieved of the moral baggage of paying their mortgage, instead use the cash – – according to the article – – to dine on steak at Outback, take their "gas-guzzling airboat out for the weekend", and visit the Hard Rock Casino. Blowing off their mortgage payments has "become a life raft" according to the man of the family.
The older Pemberton explains away her not paying the bank by stating "They're all crooks."
These people represent 650,000 households that stopped paying their mortgage for at least 18 months. Both elder and younger Pemberton took cash out of their houses with refinancing, spending the winnings on such things as a new truck. Mr. Pemberton, proving the apple doesn't fall far from the tree, also puts the blame at the bank's feet: "They went outside their own guidelines on debt to income……..they put themselves in jeopardy."
Not to put too fine a point on it, these people make me sick. My wife and I bought our house with a down payment earned with hard work. We filled out all the paperwork honestly and with complete documentation. We haven't missed a single payment, or even been a day late, not even once. Never in a million years would I consider flipping off the bank and just hanging out in this house for free until I was thrown out onto the street.
The value of our house did indeed decline after we bought it (quite a few years ago), and the only "recourse" I took was filling out the paperwork to the county so that our taxes could be adjusted for the lower value, which is certainly fair. Anyway, I found the topic in the article outrageous.
