PD is right. Many people whose homes should be paid off, started riding the MEW wave in 1999 – 2004, to buy new kitchens, college degrees, vacations, cars, business expansions, remodels, 2nd homes, stocks, and more.
While I had my realtytrac.com membership, I could go into the NOD’s loan history. In Poway, there were about 6 foreclosures (many more NODs), and half of those (3) were owned by borrowers who made their home purchase in 1980 – 1983. The other 3 bought at the top of the market in 2002 – 204.
So for Poway, although a small sample, 50% of the foreclosures are from people whose homes should have been paid off, the group that Diego Mamani describes as settled in their homes. Far from it! Even my neighbor’s mom just took out a HELOC to build her dream kitchen. PD’s mom did this too, right? A journalist wrote that her parents refied the equity out to go on a spending spree.
Now for the details: these 3 couples in Poway started taking equity out of their homes around 2000 – 2002. Once, twice, or more. They almost doubled their mortgage amount during that time. The streets are Country Creek, Millards Lane, and Bridlewood. Only 1 of these homes was for sale. The other 2 NOD people were not listed for sale! Why? Were they hoping to come up with the money?
So don’t assume you know anything about anybody’s finances. “The Millionaire Next Door” should have taught us all that what somebody has in the bank has nothing to do with what they choose to buy. Debt is easy to get. Actually, the more stuff someone has, the more debt they probably have.
This NOD wave is going to hit the retired people, the long-time homeowners, the doctors and lawyers, just as hard as it will hit the lab technician who bought his house with an I/O loan.
