This past weekend the New York Times did a story titled Owners Stop Paying Mortgages, And Stop Fretting.  As a bankruptcy lawyer heavily involved in the world of consumer debt and foreclosure issues, I was stunned and disgusted by the entire piece.

Anyone who’s been awake at all over the past few years knows that the real estate market is in tatters.  We’ve got millions of homeowners who bought homes, saw their values erode significantly, and are now screwed, money-wise.  But that doesn’t give them license to go to the Hard Rock Hotel and go boating.

I’m calling that just plain absurd.  And who wouldn’t?

When you think of someone in foreclosure the picture in your mind is someone who can’t pay the mortgage and is struggling like hell to get by.  You don’t picture someone wearing their skipper hat and an ascot, sailing blissfully along the coastline and admiring the view.

If you’re behind on the mortgage and can’t make payments anymore, you go to the lender and try to work out something.  Sure, modifications and forbearances are tough to come by – but you try like hell to make it work.

Failing that, you look to get the rest of your debt under control so you can concentrate on the house payments.  You try to sell it, maybe do a short sale if you can.  And if you want to keep the house and can swing it, you look into Chapter 13 bankruptcy to make the payments manageable.

What you don’t do is take it as a “get out of jail free” card, giving you the chance to spend your money on luxuries.  That may or may not be called bad faith in a court of law, but it’s just not the way your parents raised you.

The New York Times article, however, seems to gleefully recount how Alex Pemberton and Susan Reboyras, two Florida homeowners profiled in the piece, are living the Life of Riley in the face of their foreclosure mess.  It makes them, and all defaulting homeowners, look like dishonest people who pull one over on the banks.

If I loan you money and you can’t pay me back, that’s one thing.  But if I loan you money and you decide to go on a spending spree with the funds and flip me the bird, that’s just not cool.  I’d have a right to be angry – really, really angry, in fact.

The real shame of this piece is that it’s not reflective of what people do when they fall behind on the mortgage.  Most people fight like hell to catch up, to get out from under the debt, and to do what is by all accounts the honorable thing.  They want to hold up their end of the bargain, and fail only because most lenders don’t have the same objectives.

There’s a disconnect in the real world – consumers want to make it right, and lenders just don’t give a crap.  Because consumers are real people, and lenders are monolithic corporations with bureaucracies and levels between the font lines and the decision makers.

That’s the reality, but the New York Times went for the sensational.  Boo, hiss.

And in the end, someone is going to stand up at a Congressional hearing and hold up this article as proof that American homeowners are dishonest and are the ones who have wrecked the housing market in spite of the best efforts of the lenders.  We’ll see the same game play out that we watched in the run-up to the 2005 changes to the U.S. Bankruptcy Code, when creditors claimed that consumer debtors were dishonest and cheating scoundrels.

People who paid their credit card bills stood up and decried the lack of honesty, the sheer gall of others who dared to shrug their shoulders and walk away.  They were enraged because those who were paying (the thought went) we subsidizing those who were not.

Of course, that wasn’t true.  Still isn’t.  But the press sold the American consumer down the river.  And in this story, they did it again.

Bookmark this post, folks – this is not the last time you’re going to hear about this story.