re: #313 NJDhockeyfan

Or this case in NY, where someone ran the numbers and found something just doesn’t add up.

This house originally cost $100,000. In 2005, as the housing market heated up and I needed cash, I refinanced it. An appraiser said it was worth $154,000 — which I thought was too high but nonetheless accepted. I cashed out the house at that value.

Today, with the housing market in bad shape, the house is worth about $120,000. On top of that, it is starting to fall apart. Several thousand dollars worth of repairs here; a thousand dollars there — it all adds up. At 51, I am in no condition to do the repairs myself, with a bad leg and a touch of arthritis. Why would I invest my money, anyway, on a declining asset I never intend to own?

The main toilet is broken upstairs; the roof is leaking into the kitchen ceiling, the ceiling is falling down. The floor in the back room is coming apart.

The woman in this article bought the house for $100k, refinanced at $154k in 2005 (cashing out in the process), and the house now worth $120k (more than when she bought it, but more than what she has on hand to cover the mortgage).

Whose fault is that - it isn’t the banks fault; it isn’t the government’s fault. It’s on the homeowner who took the money and paid for whatever it is that she did with the money. Her current mortgage is $1,450, which means that she’s essentially has a 6.5% mortgage rate, $5k in taxes, and $900 in homeowner insurance (roughly $1,450 monthly payment). If her taxes are lower, the interest rate would be higher.