Sob Story Central

The_Tim

A story in today's Seattle Times caught my eye. It's one of those typical economic downturn anecdote stories that have become popular lately. Two jobs gone; money running out

In this tale, Ron Henson of Kenmore was laid off from WaMu in April 2007, got a contract position at RealNetworks in June 2007, then bought a 1,350 sqft 3-bed 2.25-bath house in Kenmore for $387,500 in February 2008.

Surprise surprise, the contract job ended a mere four months later, and now he's running out of money to make the $2,700 a month mortgage.

Hard to believe that even as recently as February people without "permanent" employment were still jumping headfirst into nearly $400k homes and being approved for the mortgage.

LUC

Unbelievable, the first thing I did after being laid-off from Amgen was to sell my condo to save money.

Markor

Henson may have done right. Because he's in certifiable financial distress, perhaps he'll get the house loan reduced to $200K, compliments of taxpayers. Then he can take a lower-paying job.

The_Tim

Here's another sob story from today's P-I: The Money Squeeze: Economic crisis devastating for family with autistic son

Over the past seven months, Robert Ott's fortunes fell harder than any stock market.

The credit freeze and collapsing housing market gutted the veteran real estate broker's income, forcing his family to devour savings, sell heirlooms and, in a heartrending decision, cut their son's autism treatments.

Today, the Ott family 401(k) is bone-dry, their savings long gone, a crucial line of credit cut. Their Ford F-250 truck, Renton home, even Ott's rare coin collection -- one of the few things he inherited from his father -- are up for sale, or could be.
...
The Otts first stumbled along with the local housing market last year.

Robert Ott, 42, sells homes throughout the Eastside, where sales plummeted 38 percent in the first nine months of this year compared with the same period in 2007.

Do I feel bad for this family? Sure, having to cut the behavior therapy for your kid sucks. However, is the sympathy meter pegged at 100%? Nope.

Teetering on the edge of working poverty after Ott's income plunged from $120,000 to $38,000 last year, they simply can't afford autism treatments that can cost more than $60,000 a year and aren't covered by insurance.
...
In the backyard, there are still trappings of a flusher life: a Striper fishing boat, a spare truck, a Lexus sedan.

Ott, however, has used the boat so rarely he's never refilled the gas tank since he bought it three years ago. It's for sale, along with his truck. The Lexus sedan? It won't draw much interest, since it has 220,000 miles on it.

I've renamed this thread to be more of a central repository for this type of formulaic local news story in the future.

david_mcmanus

On a human level, I do feel sorry for this family. I'm praying for them. On a professional level, it's another story. I am reminded of how flashy most agents and brokers were as recently as earlier this year and insulted anyone who said that we were in a bubble or that the market was not sustainable. Anyone who used a HELOC as a "lifeline" or emergency savings is no different from someone who uses credit cards as an emergency fund. What is really scary is that someone like this was convincing someone else to make the biggest purchase of their lives. I feel sorry for someone who was convinced to buy last year than someone who made a very nice living doing it. They say their savings was gutted. I say they never had a "savings account" to begin with. It would be the same as if I took my AMEX with the 100K limit and said "here's my savings account!"

The_Tim

david_mcmanus wrote:

On a human level, I do feel sorry for this family. I'm praying for them. On a professional level, it's another story.

That's a great way to put it, David. You have articulated my feelings better than I was able to.

Ubersalad

I don't think it's wise to comment on this story.

david_mcmanus

Why do you say that, Uber?

Ubersalad

There's nothing to say about the sad story. Move on.

Charles Dean

Most cryptic post EVER.

EconE

I'll comment.

In fact, I'll comment on a comment made by Ron Henson in the comment section of his article.

"The drop in the economy is nothing new, it happens every few years in October during a presidential election. Everyone gets in a uproar about the stocks, their retirement, etc, however we all recover."

Happens every few years?

'nuf said.

The_Tim

Here's another one: How one troubled Puyallup homeowner looks for a way out

Olga Kimbrel has a terrible mortgage on a house worth $50,000 less than what she paid for it two years ago. She owes another $80,000 beyond that in credit-card debt and student loans.

And still, she can't walk away.

"I'm doing everything I can to retain my house," said Kimbrel, 29, a registered nurse who has been trying for months to work out a new loan with the company servicing the mortgage on her Puyallup home.

After a traumatic year in which, she says, she was abused by her estranged husband, fired from a job and treated for a mental breakdown, Kimbrel says she craves stability. She's back on her feet, making $30 an hour at a new job, and says she intends to repay every penny of debt so she can keep her house in the same neighborhood where her parents and aunt live.

But as much as Kimbrel wants to work it out, the numbers may not work.

"This is someone who would be better off filing for bankruptcy," said Robin Tan, a certified financial planner with KMS Financial Services in Kirkland who, at The Seattle Times' request, calculated several possibilities for Kimbrel in the current real-estate and mortgage market. "If this was my sister, I'd say, 'Why put yourself through that? ... She can rent a place for $800 a month. Why pay $2,000 for a house or mortgage?"

TheMightyQuinn

"She can rent a place for $800 a month. Why pay $2,000 for a house or mortgage?"

But she'd be throwing away $800/month instead of being awash with equity! Right?

My goodness. If only she (and many others like her) had thought about that before going into debt for a house.

Lake Hills Renter

But no one told her the property ladder was an A frame!

uwp

That last one is easy. Give the keys back and move in with Mom and/or Aunt away from abusive husband.

buyStocks

just cry me a friggin river

Perhaps things need to be put into perspective:
she's not dying, she doesn't have cancer, and she's not starving to death

jon

Feds Charge: The $50 BILLION Scam

http://abcnews.go.com/Blotter/story?id=6444781&page=1

Wow. just wow.

cheapseats

"More than half of delinquent homeowners whose mortgages were modified earlier this year ended up redefaulting within six months, a top bank regulator said Monday."

http://money.cnn.com/2008/12/08/news/ec ... 2008120917

Thats great, lets just prolong the foreclosure process for another year and burn up some tax dollars while we are at it..

Ouch!

Please, everyone, shed some tears for another NY lawyer accused of stealing millions from hedge funds, who the judge wouldn't release on bail:

Mr. Dreier, the owner and founder of Dreier L.L.P., which employs 250 lawyers, was charged in a complaint unsealed on Monday with stealing about $113 million from hedge funds since October. But the government on Thursday told Judge Eaton that the losses were climbing.

http://www.nytimes.com/2008/12/12/nyregion/12lawyer.html?em

I know it's not in the billions like trader Madoff's fraud, but still I see a trend here...

jon

http://www.page2live.com/2008/12/16/mad ... #more-2687

While Realtors are lining up to grab the expected sales of mansions whose owners lost the millions they invested with the disgraced Wall Street big, one scene at Mar-a-Lago Saturday night illustrates the tension.
...
He reportedly told Jaffe: "You've got a lot of nerve showing up here!"

It went downhill from there.