…because they are idiots:

Susan Fallis, a communications professor at Saint Mary’s College in Moraga, so far seems to fall into the “get the loans off the books” camp of Wachovia customers. In 2004, she sold the Santa Cruz parking lot her father bought in the 1960s for his mobile home business. She reinvested the approximately $3 million into 20 single-family houses in and around Reno, with a 40 percent down payment on each one.

Sixteen of the loans were Pick-a-Payment mortgages from Wachovia. Because Reno rents dropped as her minimum payments climbed, she is now losing about $7,000 per month. She has asked Wachovia to temporarily lower the interest rate on her loans by less than two percentage points, without asking for any adjustment on the loan principal. The change would enable her to break even, but company representatives have told her allowing it “would require a complete reversal in corporate policy,” she said.

If Wachovia doesn’t allow any modifications, Fallis expects she will have no choice but to default in the next few months. She said everyone loses in that scenario: Wachovia has to sell 16 homes at a loss, 16 families have to vacate their rental properties and her family loses wealth accrued over more than a generation.

“It’s absolutely insane,” she said. “I’m about ready to become the Cindy Sheehan of real estate; this is just making me so angry.”

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/04/BU2F12NEBN.DTL

Nothing like destroying in 4 years everything your dad worked to earn over 40 years. And of course, she blames the bank instead of herself.