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Helping Bubble Victims

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February 05, 2008 – Comments (8)

In short, there is no way to help these people. They screwed up major, and they will walk away from these mortgages. Let it happen, let the prices fall, and let people who know how to deploy capital wisely step in to buy when the price is right.

"We're in so deep that it doesn't seem like anything will help," said Rebekah Ao, 33, a pregnant homemaker who lives in a new four-bedroom home in Avondale with her husband, Otto, a truck driver. The Aos, with $50,000 in income, owe a total of $607,000 on mortgages for two houses they bought since they moved to the Phoenix area about two years ago.

full story 

8 Comments – Post Your Own

#1) On February 05, 2008 at 1:36 PM, floridabuilder2 (99.34) wrote:

boy you are wasting no time in reclaiming your top spot in blogdom.... rest assured not that i am in semi retirement, I will be visiting your blog quite often..........  the BAC upgrade has me simmering and it is very difficult for me not to blog today...  I have my trusty 24 oz monster energy drink nearby to keep me relaxed, but I am simmering below...............

oh yes, I'm sure an increase in the federal guaranteed lending limits would solve our pregnant friends problem

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#2) On February 05, 2008 at 1:37 PM, ValueIsValuable (82.52) wrote:

The last line of the article is exquisitely ironic: "we're just throwing our money away every month."  That's the same thing I hear every time I mention to folks that my wife and I rent a townhouse in the Bay Area for roughly 30-35% of what it would cost to buy.

 Strange days indeed...

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#3) On February 05, 2008 at 1:45 PM, leohaas (35.73) wrote:

I agree 100% with you, but how did these people get approved for $607k in mortgages on $50k of yearly income? The involved bank is getting what it deserves!

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#4) On February 05, 2008 at 2:32 PM, EScroogeJr (< 20) wrote:

Moral: it's hard to find a winning real estate investment among the desert properties. Who would have known? :):):)

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#5) On February 05, 2008 at 3:58 PM, TMFBent (99.83) wrote:

But... They're not making any more land! (Netherlands and Hong Kong excepted...)

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#6) On February 05, 2008 at 8:34 PM, abitare (58.11) wrote:

"here is no way to help these people"

There is help:  Youwalkaway.com

http://bigpicture.typepad.com/comments/2008/01/site-of-the-day.html

Lord Humungus gives a great speach about just walking away here:

 

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#7) On February 05, 2008 at 9:01 PM, SpaceMonkey01 (73.93) wrote:

WHen I bought a place in 2004, the loan officer proudly told me that person in before me closed on a no doc, no down, interest only loan on a 4 million dollar house. Thought this was an extrordinary circumstance but based on the size of the meltdown, I guess not.

 I am sure this guy (as probably many other industrious beavers) thought he would rent out the rooms to people for a couple of years to make the mortgage payments and then flip it. Wonder how that's working out for him. 

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#8) On February 06, 2008 at 12:25 AM, EScroogeJr (< 20) wrote:

"Wonder how that's working out for him. "

Chances are, it's working out for him much better than two $300K piles of bricks in the middle of the Arizona desert are working for the would-be Donald Trumps featured in the article. It's a classic mistake of the amateur real estate investor to choose a $300K house over a $4M house.

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