Negative Equity induces a new Negative Trend
The foreclosure crisis has culminated into many social problems, including dishonesty and throwing ethical standards to the winds. Instances of many underwater borrower-house owners just leaving the lending bank in the lurch, by simply stopping payment and dare their lenders to do what they can – have come to light.
The latest news story pertains to Alex Pembrton and Susan Reboyras, residents of Florida, quoted as example for this bizarre twist to foreclosure episodes. The couple had their home they were living caught into the foreclosure process. The property went underwater for the same and similar reasons of the market value going down below what they owed on mortgage, inability to meet family expenses including medical problems etc. and even after their lending bank allowed them to re-mortgage their home, they used the borrowed money only for their business.
The Florida couple bought a truck with the money, which was necessitated for the attic-renovation business. When circumstances reached a crucial stage, where they had to choose – either declaring bankruptcy by paying off more than the property was worth or resisting the foreclosure action by the bank, they chose the latter option.
They ceased paying the mortgage last summer and concentrated in building their future, by involving themselves fully in their business. The worry of foreclosure of their home did not bother them either – they spent their leisure as any normal persons would – a trip to the local casino; an occasional steak out, or an outing in the airboat they own.
Mr. Permberton is quoted as saying “instead of the house dragging us down, it’s become a life raft; it’s really been a blessing.” Any moral reservations? No – they still think it is the fault of the bank and not theirs. The pair says they are using the “money saved” by stopping repayment instalment of $1,837 every month wisely.
That said it is a question of throwing good money after the bad money for many Americans. Otherwise how will you explain the 1.7 million foreclosure suits in the country, bogged down by legal counter-suits by troubled home owners, the applied pressure from the government to re-negotiate mortgages and the sheer volume of workload?
It is also a fact that the average borrower facing foreclosure is delinquent by 438 days presently.
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[...] The foreclosure crisis has culminated into many social problems, including dishonesty and throwing ethical standards to the winds. Instances of many underwater borrower-house owners just leaving the lending bank in the lurch, by simply stopping payment and dare their lenders to do what they can – have come to light. Read more [...]