Here’s a story from Maricopa, AZ. Maricopa is on the far fringes of the Phoenix metro area, and hard hit by the housing bust. One thing that struck me about this story was one of the comments made afterwards. This story is being told thousands of times across the nation- only the name and place changes:
A total of 325 homes in Maricopa were foreclosed during the first quarter of 2009. In 2008, there were 1,055.
There are five foreclosed properties alone in Christopher Fortin’s cul-de-sac on Windsor Drive.
And Fortin’s home may be next.
In August, the house he purchased in February 2006 is scheduled for auction on the steps of Pinal County Superior Court in Florence.
"I’m still working on it; I’ve been working on it since December," Fortin, 36, said of trying to renegotiate his loans. "It would almost be easier to let it go at this point."
Fortin, his wife and two children, ages 10 and 12, live in the Alterra subdivision of Maricopa. He bought a 1,300-square-foot home for $212,000 after friends encouraged him to check out the area.
Fortin said he probably made some poor financial decisions – a second adjustable-rate mortgage, heavy dependence on credit cards.
He’s currently working with his lender to stay in the home. It’s near his children’s school, and the family enjoys living in Maricopa.
Fortin has thought about moving back to Niagara Falls, N.Y., where they lived before a cross-country relocation in 2003, but "there’s nothing there but high taxes and cold weather."
"To be honest, I’m to the point where the house itself means nothing to me," he said. "To me it’s just a structure, right? My interest is to make sure my wife and kids have as little disruption as possible. If that means we rent a house, so be it."
Here’s the comment from "AZMaestro" that seems incongruous to me:
My compassion goes out to this family, and to echo what has been mentioned by many others, the real economic crisis was when prices skyrocketed out of control. Now everybody is suffering the consequences, including lost revenue for education and other public services.
I don’t have a problem with the compassion, but it doesn’t sound like high prices were what got Fortin in trouble. By his own admission, the problem was he made stupid financial decisions and the lenders were stupid to let him. That makes it tough on the family, but it doesn’t sound like losing the house and moving into a rental would be a crisis for this family. The question is then, what’s the real crisis here?
The real crisis it seems is now the international financial crisis (impacting everyone), because the “real-estate banking complex” made everyone that rented feel like scum, and that owning was the right thing to do. Many people would have been better off renting, and today are much better off renting, as rents have gone down in most areas. . .especially Phoenix, NV, and SoCal.
I have owned, and I have rented, and both have advantages and disadvantages. I rented for three years here in SD before buying recently, and I enjoyed not having to deal with repairs, etc. Just call the landlord. Either way, if you have a mortgage, you don’t own the home . . .you are renting from a landlord or renting from a bank.
We are now stuck with another 5 to 10 years of a bad economy because of the housing bubble.
Sounds like AZ Maestro may be going the way of Fortin, if you ask me.
He likes high prices, but doesn’t like stupid decisions…
Little problem: they went hand in hand. You can’t have high prices without the thousands of stupid decisions.
I do agree with one thing… cash and carry is a harder lifestyle but ultimately allows one to sleep better at night. I speak from experience.
Chuck Ponzi
“My interest is to make sure my wife and kids have as little disruption as possible. If that means we rent a house, so be it.”
Oh my goodness, Chris. You are going to rent? You have decided that this is now a reasonable possibility to minimize disruption? Surely, moving back and forth from the Canadian border to the Mexican border, and sweating out unaffordable loan payments since ‘06 while waiting for the other shoe to drop are more disruptive.
But I love that this is still a close call for him. He must love house debt. And cow smells.
“The question is then, what’s the real crisis here?” –AZMaestro
My answer; A lack of viable employment.
It is my studied opinion that the U.S. long ago exceeded “maximum viable employment numbers.” We must remember that housing WAS the employment. Unsustainable, yes, but the basis for a large percentage of our employment base, none the less.
The law of diminishing returns is raising havoc with our delusional underpinnings of exponential growth. The exact sciences take no prisoners and go about their work in a totally unemotional fashion.
At least Mr. Fortin is owning up to his mistakes and actively working to correct them. It’s refreshing not to see someone whining about predatory lending or some nonsense – this guy has the sense to realize he spent more than he could afford, and has to pay for it somehow.
reply to mtnmike.
“our delusional underpinnings of exponential growth”.
Yep.
http://www.youtube.com/watch?v=F-QA2rkpBSY
It seems boring, but it IMHO is one of the
“Most IMPORTANT Video(s) You’ll Ever See”
cpgone,
Thanks for the link. I have studied Dr. Albert Bartlett for years along with M. King Hubbert and others who have pointed to the root cause of our downfall. It’s a shame that more people don’t understand the basic premise of exponential growth.
Somebody, somewhere, has to make a game show out of this. Wheel of Misfortune?