Sunday, May 31, 2009

Alt-A Bomb

I haven't done this in a while, so lets do some detective work and poke at house debtors.

Here was the story:
2009-05-30: Alt-A Loans, Second wave of foreclosures ahead
Refinancing three years ago into a pay-option loan allowed Kristi and Marvin Laron to avert a jump in the monthly cost on the original loan the couple used to purchase their Cloverdale home. The loan’s minimum payment was $400 lower than their previous mortgage payment.

Our whole goal was to pay less,” Kristi Laron said. “We figured we were going to refinance again. Who knew what was going to happen.”

Now the Larons are stuck with the loan and face a $1,000 hike in their monthly mortgage payment, boosting it to about $3,200. The couple can’t refinance because they owe more than the house is worth. Their lender has denied requests to change the loan and avert the payment jump, primarily because the couple has not fallen behind on payments and doesn’t have a financial hardship.

“We’re trying to avoid foreclosing on our house. We’re trying to do the right thing and nobody wants to help,” Kristi Laron said. “We both have jobs and we can’t really complain except for wondering what the future holds.”

Here is the house:
433 Reisling, Cloverdale, CA
Z-Estimate: $340,000
Sold: 1/20/2005
Sale Price: $400,000
2008 Property Tax: $5,361

There is a house for sale in the neighborhood for $300K. As the bomb starts going off, how many houses in this neighborhood will succumb to foreclosure? And check out the property taxes; the price of "ownership".

Was their long-term plan to continue refinancing to keep their house ponzi going?

Final Question: Who will help the Larons?
(click HERE for answer)

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