Your Tax Dollars At Work
Via Ace here’s a report that just really really ticks the living dog snot out of me.
ST. PETERSBURG, Fla. — For Alex Pemberton and Susan Reboyras, foreclosure is becoming a way of life — something they did not want but are in no hurry to get out of.
Foreclosure has allowed them to stabilize the family business. Go to Outback occasionally for a steak. Take their gas-guzzling airboat out for the weekend. Visit the Hard Rock Casino.
“Instead of the house dragging us down, it’s become a life raft,” said Mr. Pemberton, who stopped paying the mortgage on their house here last summer. “It’s really been a blessing.”
I just don’t know what to say.
Morality, Nanny State | Mr. Bingley | 
June 1, 2010 3:23 pm
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“I tried to explain my situation to the lender, but they wouldn’t help,” said Mr. Pemberton’s mother, Wendy Pemberton, herself in foreclosure on a small house a few blocks away from her son’s. She stopped paying her mortgage two years ago after a bout with lung cancer. “They’re all crooks.”
Sorry, ma’am, but YOU’RE the crook. Life dealt you a band hand, but other people are paying for you right now. The LEAST you could do is thank ’em, not insult ’em.
“Bad”, not “band”. Sheesh!
I know of a family who, back when Barney Frank said everything was going swimmingly, bought a $450K house when there was no way — NO WAY they could ever afford to pay for it on his one small weekly paycheck. They stopped making their mortgage payments and essentially lived in the house for “free” for a year while the bank let them walk away from the note they signed. Sickening.
This is known as “strategic default.” The way you can identify it is that that all the borrower’s other debts will be basically current. As a pure matter of economic rationality, it’s hard to see how to argue against it if you actually owe more on the mortgage than the current appraised value of the property. The courts in Florida are swamped with foreclosure backlogs: I don’t work on the civil side, but my understanding is that they probably account for 75-90% of all new circuit court civil filings, and will for at least another year. In most states, if the lender forecloses on the mortgage and fails to recover the full amount owed when the sheriff auctions the property, the lender can pursue you personally for a deficiency judgment, but in practice they just don’t have the time and resources to do that unless the loss was particularly large: instead, the lender will write off the deficiency as a bad debt and apply as a capital loss to counterbalance any capital gains, carrying it over to the next tax year if necessary…so the rest of the taxpayers get hit AGAIN.
For every story like this there are hundreds
of widows who were tricked by unethical loan companies into signing-up for loans that
were deceptive and criminal.
They were tricked by smooth talking scum into loans on
their houses that stole the
house.Those scum should be
castrated and thrown to pit-bulls.But, the government
protects them with a slap the
wrist.
I don’t think I agree with that ratio, Greg; no way it’s hundreds to one.
I’d frankly be shocked if the numbers are even equal. I think most of the people who got in trouble did so because of pure greed on their part; often aided by slick and shady lenders, no doubt, buy ultimately to my mind their greed.
I think the proportion is the complete inverse of what Greg believes it is: for every single, poor swindled widow there are THOUSANDS of these assholes who bought at the top of the market (not necessarily greed driven), are now subsequently underwater, but somehow think the bank is responsible for that fact. Since the big mean bank guys who willingly LENT you the long gone buckeroos to buy that mansion won’t just as willingly forget they gave you all that money, f*ck ’em if they can’t take a joke, right?
That’s what kills me about this whole mess.
Please. “Slick and shady lenders”? Once again letting the boogeyman banker be the bad guy and the American consumer out of being a responsible adult.
You know what, Jim? EXACTLY. I don’t care HOW swindlish the mortgage guy is ~ NOTHING says $450THOUSAND McMansion like $2500 in Social Security, disability and foodstamps a month. Sign the papers, girlfriend.
Scream “you was robbed” all you want, but my sympathy meter is PEGGED.
I think there’s several contributing factors to what causes otherwise reasonable people to fall to the evils of greed and corruption. Opportunity is certainly at the forefront, however, when all we see on the telly each night is one thieving politician after the other and corporate thugs stealing the common shareholders blind, it makes skipping out on one’s mortgage payments bland in comparison. The moral compass is in dire need of repair.
Greg isn’t entirely correct, but there’s some truth there. I knew mortgage sharks who did just that: sign people to mortgages the shark knew they couldn’t afford.
They’d take a point and dump the note on a bank, VA or FHA or where ever. Most of one guy’s “clients” (more like mark) defaulted but he kept his money and job because he was a top performer in his company.
That was in Florida, by the way.
Gary, I’ll give you ten to one 90% of those people knew THEY couldn’t afford the mortgage either.
Gary, I’ve no doubt that there are plenty of sharks in the lending market. Unethical and amoral people have been with us since the dawn of time.
But there are exactly two reasons why someone defaults on a mortgage. Either they fell into hard times and lost income, OR they mismanaged their finances.
But the hard times folks get only some leeway….they have options to deal with their debts. And sometimes they slide into the “mismanaged” category.
The “mismanaged” category can generally be described as “A fool and his money will soon part company”.
In the end, each borrower is personally responsible for their decisions. Sooner or later they decided to either buck and face their problems, or take the easy road, and welsh on their loans. The folks that we are discussing here looking for an excuse to avoid their responsibilities.
Syd has the right of it — the moral compass is in dire need of repair.
I bought a smaller, older house than I COULD have afforded: because I wanted to be responsible and not risk having a big money crunch.
And now I’m helping to bail out people who did exactly the opposite of it, did it KNOWINGLY, and eat steak at Outback while I cook beans at home.
Something is wrong. Something is very, very wrong when the responsible people get screwed and wind up scrimping while the irresponsible people party.
THS, some people can be talked into anything. The swindlers I mentioned above knew the applicants couldn’t afford it but were smooth enough to talk them into it. Sometimes it takes a village to raise an idiot.
Regardless if they were talked into something they couldn’t afford which I find real hard to believe in most cases such as this one since they do mention a family business which should mean they know something about money, these people are without shame, crooks really. Why aren’t they saving the money instead of spending it on recreation? Another case of it’s not my fault. Disgusting.
Major Dad, I’d like to note that the federal mortgage bailout has a lot to do with this.
I know a guy who’s a YEAR behind on his mortgage. Instead of losing his house as he should have, he’s on the bailout list. He laughs about it and even admits it’s his fault. That’s also disgusting.