I ran across an interesting article in the New York Times today where it would appear that consumer psychology among homeowners in foreclosure has taken a change for the worse, or better, depending upon your point of view.
It [lender giving a home equity loan] was a stupid move by their lender, according to Mr. Pemberton. “They went outside their own guidelines on debt to income,” he said. “And when they did, they put themselves in jeopardy.”
Moreover, it would seem that it’s become a new pop culture norm to vilify the banking and lending industry.
“I tried to explain my situation to the lender, but they wouldn’t help,” said Wendy Pemberton, herself in foreclosure on a small house a few blocks away from her son’s. She stopped paying her mortgage two years ago after a bout with lung cancer. “They’re all crooks.”
So from a third person point of view, this is nothing but a sad little game of “you [the borrower] owe me money” versus “you [the lender] shouldn’t have loaned me the money because you’re a crook and took advantage of me“.
In essence, it’s nothing but a cat and mouse game composed of individual parties looking out for their own best interests.
After all, it’s human nature to enter a mode of self preservation in times of distress, and with walking away from your mortgage gaining more and more momentum (herding behavior), it’s not surprising to see a shift in homeowner mentalities from “I’m so embarrassed to be in foreclosure” to “The bankers were dumba**es for loaning me money in the first place“.
As I said before several times, the social stigma of foreclosure is ending and will be a major trend in American culture for years to come, but as it would appear, one of the easiest ways for loan defaulters (purposeful or no fault of their own) to lubricate this shift in the American social construct is to blame it all on the big bad bankers. This way, having some sort of justification makes them feel better for breaking their word, and their contract, when they purchased their home.
Of course, strategic defaulters may not realize they will become as unpopular and unethical as the very people (e.g. bankers) they’re rebelling against.
Photo by cenz
(For Simpsons purists, yes, I know Mr. Burns isn’t a banker. However, I chose the photo because he’s probably one of the best known fictitious antagonists/villains of substantial wealth that we love to hate.)