Ms. Richey, the teacher, arrived in Palmdale in 1999. In 2004, she and her husband, Timothy, bought a two-story home on Caspian Drive, near Avenue O-8, with a no-down-payment loan. They took pride in the amenities they installed: a powder room with granite countertops, a backyard pool and play area, and the purple-and-turquoise fantasy playroom upstairs for their three daughters.
But the value of the house plunged to less than $200,000 in 2009. Their $430,000 mortgage, with its $3,700 monthly payment, began to look more like an unwanted burden. By May, amid troubles getting tenants for two rental properties she also owned, Ms. Richey decided the time had come to cut a deal with America's Servicing Co., a unit of Wells Fargo & Co. servicing the mortgage on the house.
After three months of wrangling, she says she finally received a modification approval. The new monthly payment: about $3,300, far more than she had hoped. A Wells Fargo spokesman confirmed the bank offered Ms. Richey a modification under the Obama administration's Making Home Affordable program, and said, "The Richeys turned down the lowest payment we could offer."
Ms. Richey and her husband had already been working on Plan B -- exploring the neighborhood's "For Rent" signs.
On one trip, they drove by the house at 3152 Club Rancho Drive. It was bigger than their house on Caspian, had a pool with three waterfalls, and boasted a cascading staircase that Ms. Richey says she could picture her daughters descending on prom night. The rent was $2,195 a month.
. . .
Ms. Richey and her family made the move to Club Rancho Drive in August, when she was already several months behind on the mortgage. With Mr. Robbins's help, she recently sold the house on Caspian Drive for $195,000, money that the bank will accept to settle the $430,000 mortgage debt. She's also considering walking away from the mortgages on her two rental properties.
Showing a visitor the personal touches in her new home, including a $1,800 dining set she bought with some of her newly available income, she notes the advantages of being a renter rather than an owner.
"You take a risk for the American dream," she says. "I don't have to worry about paying property tax, homeowners' insurance, the landscaping, cleaning the pool or any repairs."
A teacher with a $430,000 mortgage? I'm supposed to feel bad for them?
I know of a person who worked commission sales for the past 15 years. He was making in excess of $250,000 a year and lived in a $500,000 + house. He told me last week that his industry has totally collapse and he will probably be on the unemployment line after the holidays.
He also told me that he hasn't made a mortgage payment in nearly a year and he will be filing bankruptcy.
The question I have is this. How long should someone be able to live in a $500,000 house not making any payments for principal, interest, real estate taxes, or insurance payments before they are thrown out.
I mean the Gekko's pay our mortgage on our little three bedroom bungalow. How about we pay our mortgage payment and move into tho these douche bags half million dollar home and the can live rent free..... on the streets?
Read the rest here if you can stomach it.
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