In recent Angrywoodchuck posts you’ve read about how strategic default is the new black.
For Alex Pemberton and Susan Reboyras, their foreclosure has been a blessing in disguise. They’ve been able to use the money that they once wasted on a mortgage to stabilize their family business, get a nice juicy steak at Outback Steakhouse from time to time, run their gas-guzzling air boat out on the wetland flats for the weekend…and hell, with all that money they’ve been saving by not paying their mortgage, they even have some cash left over to live it up at the Hard Rock Casino!
Quick pop quiz for my readers; have you been paying your mortgage or rent since last summer? Well, you’re the only one…’cause Mr. Pemberton hasn’t!
“Instead of the house dragging us down, it’s become a life raft, it’s really been a blessing,” said Mr. Pemberton as he rolled double sixes.
Maybe it’s genetic. Mr. Pemberton’s mom just a few blocks down the street stopped paying her mortgage two years ago and it’s been easy street ever since.
“The longer I’m in foreclosure, the better,” she said.
Indeed Mamma Pemberton, indeed!
With their credit already shot to hell, Mr. Pemberton and Ms. Reboyras had nothing to lose when they stopped paying their mortgage. Luckily, they had already cashed out through a refinance and bought a truck that they offered as a free prize in a contest for their employees.
Mr. Pemberton, keenly aware of where the burden of blame belongs, fessed up like a man. According to him, it was the lenders fault for being stupid in loaning him the money, “They went outside their own guidelines on debt to income,” he said. “And when they did, they put themselves in jeopardy.”
Wait, but there’s more…
Not only can squatting in a home you aren’t paying for allow you to live “la vida loca” like Alex and Susan, it can also pad your retirement!
Jim Tsiogas stopped paying his mortgages in August, 2008, both on his own house and two rental properties. You can bet your bottom dollar he is renting out those rental properties, so not only does he pay $0 for his own mortgage, he’s got two rental income streams coming in every month. The bank has changed its tune recently and sends letters now that say, “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.”
He sure will be.
Mr. Tsiogas is saving $2,500 a month by not paying his mortgages, which will net him $45,000 over the average time it takes for a foreclosure to close. That’s not including the rental income for 18 months from the two properties.