Hating on "Deadbeat" Homeowners

As the housing crisis stretches into its fifth year with no end in sight, what little sympathy existed for people who have lost or will likely lose their houses is evaporating.

I find this odd because, really, nothing has been done to help the vast majority of these people. HAMP was a sick joke. Government efforts to keep people in their homes have done nothing of value. Banks have not cut realistic deals with underwater or delinquent borrowers. Instead, they sit with billions in bad loans on their books at peak market valuations.

But the bad guys in this story are increasingly the borrowers themselves, who have been waiting for a reasonable solution for so long, that people have forgotten they are the most powerless players in entire bankrupt system. Inevitably, they are being portrayed as the reason for the endless "downturn" (depression).

This is akin to blaming a cancer patient for her body's failure to respond positively in the face of botched diagnoses and substandard care. As if healing is the responsibility of the patient, and not of the various experts hired to cure her.

A Nation of Squatters

Last week financial blogs all posted a story from CNN about the hundreds of thousands of Americans who were effectively squatting in their own homes. Many have not paid their mortgage for at least a year; some last sent in their monthly check five years ago. That's a long time not to pay rent or house payments. Resentment of freeloaders by people who do pay for housing month after month, year after year (e.g. the vast majority of us) is natural.

But there is more to this anger than first meets the eye. Judging by the hundreds of comments made in response to this article, it is clear that a lot of Americans now blame their "deadbeat" neighbors for the fact that they are now, or may soon be, underwater themselves. And we all know that sympathy for others tends to go down sharply when the other is perceived as a threat to your own well-being.

Ironically, this uptick in anger towards "squatters" conveniently leaves off the hook both banks and government agencies who had long since promised to solve the crisis (but have done no such thing). There is even a new argument creeping into the chat boards to the effect that banks may have been the original cause of the crisis, but two wrongs don't make a right. At this point, this chain of logic continues, it is the quitters who are threatening the security of the majority.