because of no fault of their own. From today's WSJ:
Faces of the Home-Foreclosure Crisis - WSJ.com
According to the Federal Reserve, Americans withdrew more than $1.1 trillion of equity from homes in 2006 and 2007.
When Ghislaine Apollon emigrated from Haiti to the U.S. in 1974, she dreamed of owning a home. In 1997, after years of scraping by, she bought a fixer-upper in the Queens section of New York City.
Her original $147,000 mortgage was affordable on her income of about $1,600 a month from working in a hospital linen department, she said. Ms. Apollon then made some costly choices. First, she refinanced several times and took out large amounts of cash, pushing her loan balance to nearly $400,000.
the last time she refinanced she ended up with an option adjustable-rate mortgage, which lets borrowers select from different payment choices. Ms. Apollon, like many borrowers, opted to pay the minimum, which adds to the balance.
Realizing she would have to pay much more than that a month to start reducing her loan balance, Ms. Apollon sought a loan modification. She is being helped by Neighborhood Housing Services of Jamaica, a nonprofit.She wants a plain fixed-rate mortgage that doesn't grow.
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Mr. Banner bought his house 22 years ago for $296,000. By 2007, the house was valued at $429,000. Like many other homeowners at the time, Mr. Banner tapped the equity in his home by taking out a $250,000 loan. He used the money to try to keep his business afloat as the real-estate market unraveled.
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A decade ago, she and her husband paid nearly $180,000 for a three-bedroom home in Dallas, N.C., outside Charlotte. Their income easily covered the $1,100 monthly mortgage payment.
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A decade ago, she and her husband paid nearly $180,000 for a three-bedroom home in Dallas, N.C., outside Charlotte. Their income easily covered the $1,100 monthly mortgage payment.
In 2006, after discovering the house's value had skyrocketed by $100,000, the couple took out a second mortgage and got cash. They bought a $70,000 camper, took a cruise to Alaska and vacationed in Belize.
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When Chris Hanson bought his $875,000 luxury condominium in Scottsdale, Ariz., four years ago, he could afford the $90,000 down payment.
He said he had no difficulty paying the $5,000 monthly mortgage on the three-bedroom unit, which has floor-to-ceiling windows and views of Camelback Mountain. The condo is in a gated complex with a gym and pool.
And, true to his word, he didn't miss a single paymentuntil last month. Concluding that the home, now worth about half of what he paid, won't recover its value for at least 10 years, Mr. Hanson decided to walk away.
"It's a no-brainer once you do the math," said the 27-year-old real-estate investor.
Faces of the Home-Foreclosure Crisis - WSJ.com
According to the Federal Reserve, Americans withdrew more than $1.1 trillion of equity from homes in 2006 and 2007.
When Ghislaine Apollon emigrated from Haiti to the U.S. in 1974, she dreamed of owning a home. In 1997, after years of scraping by, she bought a fixer-upper in the Queens section of New York City.
Her original $147,000 mortgage was affordable on her income of about $1,600 a month from working in a hospital linen department, she said. Ms. Apollon then made some costly choices. First, she refinanced several times and took out large amounts of cash, pushing her loan balance to nearly $400,000.
the last time she refinanced she ended up with an option adjustable-rate mortgage, which lets borrowers select from different payment choices. Ms. Apollon, like many borrowers, opted to pay the minimum, which adds to the balance.
Realizing she would have to pay much more than that a month to start reducing her loan balance, Ms. Apollon sought a loan modification. She is being helped by Neighborhood Housing Services of Jamaica, a nonprofit.She wants a plain fixed-rate mortgage that doesn't grow.
---------------------
Mr. Banner bought his house 22 years ago for $296,000. By 2007, the house was valued at $429,000. Like many other homeowners at the time, Mr. Banner tapped the equity in his home by taking out a $250,000 loan. He used the money to try to keep his business afloat as the real-estate market unraveled.
---------------------------
A decade ago, she and her husband paid nearly $180,000 for a three-bedroom home in Dallas, N.C., outside Charlotte. Their income easily covered the $1,100 monthly mortgage payment.
---------------------------------
A decade ago, she and her husband paid nearly $180,000 for a three-bedroom home in Dallas, N.C., outside Charlotte. Their income easily covered the $1,100 monthly mortgage payment.
In 2006, after discovering the house's value had skyrocketed by $100,000, the couple took out a second mortgage and got cash. They bought a $70,000 camper, took a cruise to Alaska and vacationed in Belize.
-------------------------------------
When Chris Hanson bought his $875,000 luxury condominium in Scottsdale, Ariz., four years ago, he could afford the $90,000 down payment.
He said he had no difficulty paying the $5,000 monthly mortgage on the three-bedroom unit, which has floor-to-ceiling windows and views of Camelback Mountain. The condo is in a gated complex with a gym and pool.
And, true to his word, he didn't miss a single paymentuntil last month. Concluding that the home, now worth about half of what he paid, won't recover its value for at least 10 years, Mr. Hanson decided to walk away.
"It's a no-brainer once you do the math," said the 27-year-old real-estate investor.
