In a bizarre twist to the foreclosure tale, increasing numbers of American borrowers are indulging in DIY modifications, in terms of which they simply stop paying, and dare their lenders to do their worst.
Take the case of Florida residents Alex Pemberton and Susan Reboyras, for example. They went underwater for a variety of reasons, including the property crisis, medical issues, and the “stupid” decision of their bank to allow them to re-mortgage their home so that they could purchase a truck for their attic-renovation business. They were faced with two choices: bankrupting themselves by paying off more than their house was worth, or stonewalling while they rebuilt their business, and their lives.
The latter option has been good for them. Since ceasing their mortgage payments last summer, Alex Pemberton and Susan Reboyras have been concentrating on their future, not their past, and even spoiling themselves from time to time with an occasional steak out, a trip to the local casino, or an outing in their airboat. “Instead of the house dragging us down, it’s become a life raft,” Mr. Pemberton told me. “It’s really been a blessing.”
The pair form part of a growing throng of Americans who refuse to retreat into the dunce’s corner. Rather than throw good money after bad, they have decided to use what they have to get back on their feet, and move on. They don’t have to beg and scrape for mercy at a public counter any more – they can make their own decisions, and any moral reservations that they might otherwise have had are masked by a conviction that it is their bank that is to blame, not themselves.
The 1.7 million foreclosure suits current in the United States are increasingly bogged down by legal counter-suits, pressure from government to the re-negotiate, and the sheer volume of workload. The fact that the average borrower facing foreclosure is delinquent for an average of 438 days strengthens the stance of those who refuse to pay – even if they did for a while, they argue they would likely not get any money back once the sheriff had called.
Alex Pemberton and Susan Reboyras are using the $1,837 they save every month wisely. Following a campaign of printed advertisements they managed to afford local television too, and their business is flourishing again.
Needless to say the banks are still sandbagged around the moral high ground. Their spokespersons accuse people like Alex Pemberton and Susan Reboyras of milking the system, of being free riders, and of taking advantage of the lifelines offered by Washington.
What would you do if you were underwater right now?
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