Karen Trainer, Failed House DebtorAnd then the sheeple decided it didn't make "financial sense" and walked away. Walk, sheeple, walk.
(hat tip to Housing Panic)
2008-07-29: America's house price time bomb
In May 2006, at the height of the housing boom, Karen Trainer bought a $500,000 apartment in California - with money borrowed from her bank.
By this year, Karen still owed $500,000 on her mortgage, but her apartment was worth $200,000 less.
So she was deep in negative equity and, to make matters worse, the interest rate on her loan was about to increase.
"I thought 'this is crazy'," Ms Trainer says. "It just does not make financial sense."
As a successful professional, Karen could comfortably have managed the higher mortgage payments her bank demanded.
Instead, she decided to stop her mortgage payments altogether and let her bank repossess her apartment.
Her credit record will be badly damaged by the decision, but Ms Trainer expects this to recover soon.
"Generally speaking, within 5 years you are about back where you were, so my husband and I decided we'll take the hit and live with it."
2008-07-29: America's house price time bomb
In May 2006, at the height of the housing boom, Karen Trainer bought a $500,000 apartment in California - with money borrowed from her bank.
By this year, Karen still owed $500,000 on her mortgage, but her apartment was worth $200,000 less.
So she was deep in negative equity and, to make matters worse, the interest rate on her loan was about to increase.
"I thought 'this is crazy'," Ms Trainer says. "It just does not make financial sense."
As a successful professional, Karen could comfortably have managed the higher mortgage payments her bank demanded.
Instead, she decided to stop her mortgage payments altogether and let her bank repossess her apartment.
Her credit record will be badly damaged by the decision, but Ms Trainer expects this to recover soon.
"Generally speaking, within 5 years you are about back where you were, so my husband and I decided we'll take the hit and live with it."
6 comments:
I'm at a loss as to why this lady has made for Hall of Shame. I think she ought to be commended for her decision to walk. If I were dumb enough to be in her position but thanks to Keith over at Housing Panic I'm not, I'd walk away too and if yer stuck The Ace in the Hall of Shame for doing so I'd be your proudest inductee.
The Ace
Ace,
You're probably correct. This was more about the sheeple doing stupid things--over-paying for houses--then telling the world how smart they are by walking away. Lets face it, nobody with half a brain believed they would be 'priced out forever' during the boom.
Ty
I nominate Susan Fallis as the next inductee ;)
I just read this on Susan...
“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.”
What a way to waste an inheritance. Why not be more conservative and use it to just improve your quality of life? Was she planning on turning into a tiny-Trump®? I've said it many times, but I'll say it again: the average person should not invest in real estate.
And it's worse. Ms. Fallis is a very elderly lady. WTF was she planning to do with the "Millions" she was going to make? Corner the metamucil market?
$3M in a conservative investment could easily earn 5%. That's $150K/year. What a dumbass.
Or at least buy 8 houses for cash, not 20 with 40% down, which is what I infer she did. IMO seems like greed, pure and simple.
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