A recent episode of
State of Nevada (local NPR show) featured a local woman who is on the verge of losing her home. It is an interesting episode because the homeowner doesn't really evoke your sympathy (I don't think she wanted to evoke sympathy). She comes forward, tells her story, and gives people a good lesson at her expense.
Basically, the homeowner bought a home in Vegas in 2004. She and her husband used the equity in that home to buy three or four other homes (investments). They were fortunate enough to sell those homes and break even. Later, decided to use equity again to make an investment in commercial property. That did not work out. Meanwhile, health problems and the real estate down turn (her husband works for a new home builder) took their toll on their income. Also, her ARM is up and the payments on the house have skyrocketed. Now, she has about 90 days to try to sell her home as a short sale.
Her story is typical of many others here in Vegas and around the country. A real estate expert (also interviewed) talked about the new attitude people have about their homes. This attitude has people viewing their home as the bank, not as home. People are using the home equity to purchase cars, other homes, and/or vacations. They are not realizing that this equity can fluctuate with the market. What you have today may not exist tomorrow.
I think the homeowner had a "keeping up with the Jones" mentality that put her into a deep hole. She acknowledges this stating, "she would not have bought such an expensive home." Also, she talks about seeing friends doing the same thing and making money. It is unfortunate, but true. For many people the word "enough" doesn't exist. Now, the homeowner is facing the loss of her home and a bad credit rating.
She does have a good attitude about the situation. She acknowledged her part in the process and doesn't place blame on anyone else. Also, it was brave of her to tell her story (albeit anonymously). Hopefully, her hard learned lesson will help others.
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