It is Proving Profitable Not to Pay Mortgages While Awaiting Foreclosure

It is proving profitable for many not to pay mortgages and wait for foreclosure to catch up them. In states like Florida and New York where the rule is judicial foreclosure it can take a long time for the final eviction to take place as the courts and the lenders are unable to cope with the staggering number of foreclosures. Consequently the pace is slow.

In St. Petersburg Alex Pemberton and Susan Reboyras have gone underwater with the value of their house being less than the loan due amount. They have stopped paying their dues towards the mortgage per month and instead using the money saved to boost up their flagging business. Wendy Pemberton the mother of Alex is also in the same boat. She has been defaulting since 2008 spring. Today she is in her late sixties. She has refinanced many times during the housing boom years but she gained only once when she made sufficient money to build a new roof. In other instances the wily brokers promised her lower rates but made it up by charging higher fees.

For her crumbling old house Wendy Pemberton has to pay each month $938. She continues with her job of a barber but her customers are mostly seniors who do not pay her more than $8 for one cut. Moreover they are increasing the gap between visits. She feels that it is better for her to be in foreclosure longer.
In Florida on an average a property sits in foreclosure for 518 days; in New York it is 561 days. Lawyers representing the defendants claim that they can further lengthen the time. Both mother and son have engaged a local attorney named Mark P. Stopa. He is busy. Recently in one week he dispatched 1,700 letters to residents of Florida facing foreclosure suit. The letter reads that even without any defenses one may be able to continue staying in the house for weeks, months and sometimes years without submitting monthly dues towards the mortgage. Stopa is now handling 350 clients facing foreclosure. Each week about 10 new customers sign up.  Each pays him annually $1,500 for six hours of his working time. He said, “I just do as much as needs to be done to force the bank to prove its case.”
When lenders sell the mortgage the defense lawyer exploits the situation by asking the newcomer to prove his bonafide.

Senior Pemberton’s case has not moved since 17th March 2009 when her lawyer filed for dismissal of the case.

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