Bankrupt Couple Will Lose 9 Investment Homes

[marmar]

from Reuters, via AOL:



Couple Will Lose 9 Investment Homes
By DAN WHITCOMB,Reuters
Posted: 2008-05-12 14:34:37


LOS ANGELES (May 12) - A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.

Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.

"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."

Forgaard bought a house in Santa Cruz, about 60 miles south of San Francisco, in 2000. Four years later, using $800,000 in stock options, he began snapping up investment properties, putting 10 percent to 40 percent down on negative amortization loans -- in which payments do not cover the interest so that a borrower's balance grows over time.

It was those "neg-am" loans, which include triggers causing payments to balloon if the debt reaches a certain percentage of the original balance, that would come back to haunt him.

"I knew I was sitting on time bombs," Forgaard said. "I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.

"I didn't anticipate a downturn of epic proportions such that home values are 40 percent less than they were," he said. .....(more)

The complete piece is at: http://money.aol.com/news/articles/real-estate/_a/couple-will-lose-9-investment-homes/20080512110009990001?icid=1615984954x1202234019x1200304362

[babylonsister]

1. I'm having a difficult time dredging up any sympathy here. nt

[Clear Blue Sky]

2. He gambled. He lost.

The same thing would have happened if he speculated on oil or the dollar, betting the wrong way.

[SidDithers]

3. Ya plays the game, ya takes your chances...nt

Sid

[tridim]

4. The Bush legacy: Riches to rags in 6 years. nt

[thunder rising]

5. Fueled by greed and HGN "Flip this House"

[TreasonousBastard]

6. This asshole bought houses with neg-am loans in...

what he knew was a declining market?

Well, fuck him and what's the point of the story anyway-- that you can't fix stupid?

[sinkingfeeling]

7. Threw away $800,000. So sad, not.

[lpbk2713]

8. Damn I hope he voted rethuglican.

And contributed heavily to the RNC.

[damntexdem]

14. Oh I don't. I hope that he only planned to contribute to the RNC ...

once he made his fortune in real estate.

[DinahMoeHum]

9. Excuse me while I reach for the Kleenex. . .NOT.

:nopity::nopity::nopity:

[kestrel91316]

10. I gave up "investing" in the SoCal real estate market in 1997

when I unloaded my pathetic condo and was glad to get out from underneath a bad property. I consider the market here to be far too volatile to be a good place to put any money I'd like to keep.

[blondeatlast]

11. There it is, reaching, reaching, reaching, almost got it, almost, almooo...

Nope--just like their "riches", my sympathy just eludes my grasp.

[damntexdem]

12. Boo hoo hoo.

There, that's all my sympathy.

I'm not concerned about those losing "investment homes," rather with those losing their own homes they have lived in -- which this guy has not.

[bunkerbuster1]

13. I thought (hoped?) this was about Cindy and John Spencer McCain III

I guess they only own eight homes, though. My bad.

[chaska]

15. No one should have more than one home until all have one...

And everybody could have a home if it weren't for these speculator assholes. Criminals all.

FUCK CAPITALISM! Where's my goddamned guillotine?

[Zynx]

16. The whole guillotine thing didn't exactly get rid of capitalism in France.

[RB TexLa]

17. His mistake wasn't investing in real estate, it was not learning one word

diversification

[madinmaryland]

18. Interestingly, the guy is not looking for sympathy or a bailout.

He gambled and lost, and is learning the hard way. He seems smart enough as he seems understand his mistakes and is learning from them.

A freeper/repub would be looking for a bailout for his "bad" investments.