Homeowners Who Refuse to Pay Mortgages May Be First Genuine Heroes of the Recession

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We felt a little at war with ourselves when reading today's Times story about homeowners who have decided to stop paying their mortgages and let their homes go into foreclosure because screw 'em — in the words of Wendy Pemberton, who along with her son who lives down the road stopped paying her mortgage after the recession affected her business and brought down the value of her home, “They’re all crooks.” The neocon inside of us wanted to shake our fist at these people for being leeches, and point out that they're the ones who signed up for a mortgage they couldn't pay for. The liberal New Yorker in us was repelled by the mention of Scott Pemberton's "gas-guzzling airboat" and his patronage of Outback Steakhouse, and also faintly jealous that he probably has a dishwasher and garbage disposal. And yet ... overall, we felt like there was something pure and oddly right about what the Times calls their act of "passive resistance."

For instance, we can't help but admire the logic of Jim Tsiogas.


“I stopped paying in August 2008,” said Mr. Tsiogas, who is in foreclosure on his house and two rental properties. “I told the lady at the bank, ‘I can’t afford $2,500. I can only afford $1,300.’”

Mr. Tsiogas, who lives on the coast south of St. Petersburg, blames his lenders for being unwilling to help when the crash began and his properties needed shoring up.

Their attitude seems to have changed since he went into foreclosure. Now their letters say things like “we’re willing to work with you.” But Mr. Tsiogas feels little urge to respond.

“I need another year,” he said, “and I’m going to be pretty comfortable.”

Well, why not? After all, that's pretty much the attitude people at loan-origination companies and financial institutions had when they were structuring Jim's mortgage in the first place. If you can have something at little to no immediate cost, why not go ahead and take as much as you can of it? Sure, you might be doing something wrong, there might one day be consequences, but right now they're pretty abstract and far away, and if and when it all comes crashing down in the form of your home being seized/your bank being taken over by the government, at least you are one of many and thus have an excuse for your behavior. And we feel bad about what we said about Outback Steakhouse. At least these people are putting their money into something good — the economy, which, after all, needs it far more than the banks do.

Owners Stop Paying Mortgages, and Stop Fretting [NYT]