Sunday, February 17, 2008

John Bailey

John Bailey, Home ATM User
I still don't know why people want to air their dirty laundry to the MSM. Here is 74 year-old, Mr. Bailey, tapping the home ATM 4 times--the fifth time didn't work. Are we supposed to feel sorry for him? Was he planning to sell the home after extracting all the equity? Or was the plan always to walk away? And why did the lenders loan an old geezer the money? Two words... Housing Bubble.

Here's another thought. Rather than sell your home, extracting equity is a hedge against selling it at a lower price, because once you've sold it, the house is gone. If you continually pull equity out of the house, you're maximizing the pay-off without "losing" the house. Later, when you can no longer extract equity and you have absolutely no ability to pay back the loan, you walk away. He "sold" his home at the peak.

BTW, somebody explain to the Moises, also "owners" in Ventura, that they are under water. Their story is the classic 'Suzanne' situation. (Video Quote: "There is no time for us to have space." WTF! They cut back on eating out, but I think they should cut back on eating... period.)
2007-12-16: Families finding struggle to stay in pricey state as economy softens

Home information:
820 Vista Arriago, Camarillo, CA 93012
2 beds, 2.5 baths, 1,407 sq ft
Sale History:
01/11/2008: $513,155
11/29/2005: $287,500
12/21/2001: $287,500
07/03/1997: $179,000

2008-02-17: Declining values, defaults, foreclosures catch many local residents by surprise
"I never thought this would happen to me," Bailey said last month as he looked at the stack of paper that told the story of how he lost his home.The 74 year-old, who wears his red plaid shirt buttoned to the neck, is one of the 1,500 Ventura County homeowners whom lenders foreclosed on last year as the housing market crumbled under the weight of failing subprime loans.

He and his wife, from whom he is now separated, had refinanced their Camarillo Springs home four times over six years as its value steadily climbed.

But when they tried to take out money again in early 2007, they discovered that the value of their home had plummeted.

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