Use access key #2 to skip to page content.

Housing Ponzi Scheme Hits Close to Home

Recs

8

April 23, 2008 – Comments (6)

At least, this example hits close to the home of someone I know quite well, who sent the story my way.

Jon Colvin, 38, a telephone network technician and father of six children, had just informed CitiFinancial that he would be unable to make his March mortgage payment, and would probably miss April's, too. He hoped the news would finally scare the bank into renegotiating a mortgage he can't afford for a house he can't sell -- and now wishes he had never bought.

"It's not something I feel proud doing," Colvin said of missing the payments. "But how else am I going to get the bank's attention?"

Even those nice, rational people in Minnesota gave in to the bogus promises of easy credit and constantly-rising home prices.

6 Comments – Post Your Own

#1) On April 23, 2008 at 8:46 AM, TMFBent (99.82) wrote:

And let's give a big applause to this real estate agent, who didn't parrot the NAR talking points about it always being a good time to buy, and who instead tells it like it is, or may be:

"Based on what I see out here, we're headed for the Great Depression," said Dan Frie, a sales agent with Wright Sherburne Realty in Monticello, who has been in the business nearly 30 years.

While Frie blames fraud for exacerbating the problem, many of the mortgages that are in default are held by people who believed -- as many did and as the real estate community told them -- that real estate doesn't lose its value.

"And just because the national economy recovers doesn't mean that our local economy will recover, and that's what I'm worried about," Frie said.

Report this comment
#2) On April 23, 2008 at 9:55 AM, TMFBent (99.82) wrote:

Wow, this is a great series. No-holds barred and little of the usual, knee-jerk, PC journalistic instinct to blame only the lenders.

In the rush to find blame for the nation's current housing crisis, the easiest targets have been the lenders and mortgage brokers who peddled predatory loans.

But across the country, from the desert suburbs of Las Vegas to the treeless subdivisions of Wright County, many homeowners face a predicament of their own making.

Report this comment
#3) On April 23, 2008 at 9:55 AM, Gemini846 (57.62) wrote:

After talking with my cousin I have NO sympathy for these guys. If they want to default on thier morgage that THEY signed then God bless them, but don't come crying to Joe Taxpayer for a handout when Citi takes your house and puts you on the street.  Should they refinance you? Yes, Do they have to? NO!

My cousin and his wife had 2 houses one on a fixed rate and one on an ARM loan. The ARM reset and they got suckered into this gig as well. Do you know what they did? They both went and got 2nd jobs and then rented the 2nd house, moved in with her mom and rented it out to make the extra 1k morgage. They have small children at home too.

A few months later they got refinanced since they were on time with thier morgage and thier payments went down 1k/month.  They are still working those extra jobs and socking away money for future emergencies (like if the tenants loose thier job and can't pay the rent). It's called responsibility. It's what made this country great.

I promise there is some bank, some credit union, some loan agency that can loan this guy who apparently hasn't missed a payment some money.  Own up to the fact that you have a huge house for your 6 kids and stop askin for a hand out.  We aren't hearing the whole story.

Report this comment
#4) On April 23, 2008 at 10:04 AM, devoish (98.52) wrote:

Not far from Otsego Preserve, a real estate developer and two investors spent $1.5 million preparing 350 acres of farmland for an ambitious new "master-planned community" called Martin Farms

I wonder what 350 acres planted with corn would be worth?

I also enjoyed the advertisements at the bottom of page two for loans. $170,000 for $656/month. No SSN required.

Report this comment
#5) On April 23, 2008 at 10:10 AM, TMFBent (99.82) wrote:

Wow, this is a great series. No-holds barred and little of the usual, knee-jerk, PC journalistic instinct to blame only the lenders.

In the rush to find blame for the nation's current housing crisis, the easiest targets have been the lenders and mortgage brokers who peddled predatory loans.

But across the country, from the desert suburbs of Las Vegas to the treeless subdivisions of Wright County, many homeowners face a predicament of their own making.

Report this comment
#6) On April 23, 2008 at 10:12 AM, TMFBent (99.82) wrote:

I also enjoyed the advertisements at the bottom of page two for loans. $170,000 for $656/month. No SSN required.

Yeah, Google ads are never-ending sources of irony for newspapers online. They're making their money from the peddling of lousy loans, even as they explain how bad they are for all stakeholders.

Report this comment

Featured Broker Partners


Advertisement