Apr032017

Losers from the housing bust portrayed themselves as victims and heroes

The housing bust twisted people’s point of view so much that deadbeats who gamed the system for personal gain were lionized for their behavior.

Many people bought during the housing bubble because they wanted a home for their families. They stayed within reasonable debt-to-income guidelines and used fixed rate mortgages. Unfortunately, the prudent were small in number, and if the prudent borrowers lost jobs or suffered financially during the recession, most of them obtained loan modifications making their super-sized debts manageable. They survived.

Many other people bought during the housing bubble because they saw their house as an investment, or worse a cash cow they could milk periodically to supplement their spending. These people saw rising house prices as a way to cash in on the American dream. They believed their houses would go up in value forever and provide them with everything their hearts desired.

We see this as folly now, and a few of us saw it as folly at the time, but as with most financial manias, everyone making easy money was blinded to the foolishness they participated in. Rather than admit their mistake and accept the consequences, many of the losers from the housing bubble seek out ways to game the system for personal gain and justify their actions.

They portray themselves as heroes, Robin Hoods that steal from the rich and give to themselves.

In this 2012 article, the protagonist is portrayed as a victim heroically fighting back against a corrupt system.

Housing crash survivors fight back

By Anna Fifield in Phoenix — February 24, 2012 4:23 pm

“I’ve been searching for a local group like this for so long – it’s meant to be,” said Kathi Sharpe, a 53-year-old substitute teacher and single mother-of-five, attending her first meeting.

After falling victim to a dodgy mortgage broker, she has been fighting the system – and homelessness – for a decade, but she had been fighting it alone, until now.

Falling victim to a dodgy mortgage broker? I think the reporter means to say “After buying a house she could not afford or extracting all the equity for a spending binge, she has been gaming the system for a free handout.” Notice how the reporters choice of words makes this woman look like a victim who is not responsible for her own decisions. That meme is common in the mainstream media, and it’s complete bullshit.

The weekly meetings are the work of Darrell Blomberg, a self-styled “foreclosure strategist” who has not paid his own mortgage for 48 months. The former real estate agent is now helping other distressed Phoenix homeowners stay in their houses.

Let me help out this reporter again. “A delinquent mortgage squatter and failed realtor who successfully gamed the system for four years of free housing, Darrell Blomberg teaches others how to game the system to their own advantage.”

… Mr Blomberg found himself facing foreclosure after Countrywide Financial, the troubled mortgage lender, foreclosed on four houses he was trying to sell, a move that robbed him of his income.He missed two months’ payments but when he tried to catch up, the lender’s terms were so bad that he “decided to push it a little bit”.

Notice how people asking for a handout — a unilateral change to the contract totally in their favor — actually complain about the terms not being good enough. Unbelievable! And when the new terms in their favor don’t meet the borrower’s desires (total forgiveness of debt), this somehow justifies all manner of retaliation against the lender. I am constantly amazed at the capacity of some people to rationalize their bad behavior.

“I noticed that the notary had not dated her signature and I discovered that this makes a massive difference,” Mr Blomberg said.

By continuing to spot administrative errors and by writing challenging letters, he has managed to stave off a trustee sale of his house three times and still has not made any mortgage payments.

So this “hero” has gamed the system through technicalities to obtain free housing. This is something to aspire to? Should we erect a statue of this guy at the headquarters of B of A?

He knows he is fighting a losing battle – and estimates he will probably end up owing $370,000 on his $133,000 house. “My goal is to get a loan modification but I’ve been such a curmudgeon about this, they are just going to get me out of the house,” he said.

I think the word is “asshole,” but curmudgeon will suffice.

For Mr Blomberg this is now about more than the roof over his head. It has become a crusade.

“I’m taking a stand. If you want my house, you have to follow the law,” he said.

OMG! Did he just lecture us on following the law? He isn’t exactly a holy crusader fighting for truth, justice, and the American way — at least not the American way I believe in.

Rob Estes, who is fighting the foreclosure of his Phoenix house, is chastened.

I played the game of cops and robbers,” said Mr Estes, who has managed to stay in his house, thanks to Mr Blomberg’s help.

Yes. He was the robber.

“Don’t borrow money,” he shrugs after attending one of Mr Blomberg’s weekly meeting. “That’s what I’ve gotten out of all of this.”

Well, if he got the message not to borrow money, then their group was a partial success.