Orange County foreclosure stories

[Liberal_in_LA]

Less than a year and a half ago, Palmer was making $70,000 as a property manager and living in the condo he bought in 2000 for $198,000.

For years, he had handily made his $1,275 mortgage payment at a fixed rate of 12.75 percent.

A health issue he declined to discuss forced him to take out an adjustable-rate home-equity loan to pay for drugs that weren't covered by insurance.

In January 2007, Palmer got a letter from his lender telling him his mortgage was going up to $2,850 per month. The higher payments started depleting his savings.

Then, in June 2007, his mortgage payment was adjusted upward again, to $3,550.

Palmer couldn't afford it.

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He eventually began working as a real estate agent — a common line of work in Ladera, where home prices ballooned until 2006.

The family also dipped into savings from selling their Ladera Ranch home in June 2005.

Sunny admits she had dollar signs in her eyes after the value of the house reached $890,000 in 2005 — $440,000 more than the purchase price four years earlier.

They reasoned they could capitalize on the hot real estate market by using the cash to pay off Jereme's $70,000 in student loans, lease a second car and pay off medical bills.

At the time, friends in the red-hot mortgage industry suggested that the couple do 100-percent financing for a $700,000 house just a couple blocks away from the one they just sold. They ended up buying that house in 2005.

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In August 2005, they bought their home for $545,000. It was a not a subprime loan; they got the loan based on two incomes. They wanted a backyard for their children, Ashley, 8, Krista, 7 and Allison, 3.

They bought their 1,250-square-foot home when the market was near its peak.

Flash forward to March 2009.

The Tiffins' home is valued in the $290,000 to $320,000 range. They now owe more than it's worth.

http://www.ocregister.com/articles/home-palmer-house-2425795-sunny-family

[Name removed]

1. Deleted message

Message removed by moderator. Click here to review the message board rules.

[lunatica]

2. Sure. It's all those illegal aliens' fault

:silly:

[northernlights]

3. you're joking, right

please do explain. :wtf:

[imdjh]

4. Key word helped

Yes, illegal aliens in CERTAIN places (but not others) put pressure on the bottom of the rental market, and displace citizen poor people to other areas which ought to have driven property values down in those areas, and would have in 1950 when the suburbs were an open ended release valve.

Two operative factors were the 100% No Doc investor loans and the loose lending to the owner occupied market which had the effect of stuffing money into the pockets of the consumer. Those consumers were not illegal aliens. Enabling all those people to purchase property that they would never have qualified for under standard formulas had the effect of a lot of money chasing the product. Add in the hysteria of middle class people willing to pay way too much for a house, because they feared getting shut out, and you have the disaster we now see.

Another, often over looked factor is zoning. Prior to zoning laws, the market shifted to the needs. Expensive neighborhoods became ghettos when the tastes of the rich changed. Residential areas became commercial, and commercial areas became residential. The tony shopping and residential districts now famous for their desirability or exclusivity would never have come about if there had been the modern zoning laws when they were built. Zoning laws are essentially an application of suburban mentality on an urban landscape. If our ancestors had been forbidden from living in the backs of their stores, or putting a store in their living rooms, virtually none of the chic walking business districts we know and love would have come into being.

[The_Casual_Observer]

5. The housing bubble happened because of actual people like that

participated in it. Nobody seemed to question the sanity of $800,000 1200 sq ft houses at the time. Now, it's all this shit about regrets & "How did this ever happen"?