Stupidity and the mortgage crisis

With all the evil banker stories it's important to remember the housing crisis was also made possible by Les Meyers & Tom LeTendre. ------------------------------ Les Meyers, 74, spent a half century in real estate in Indiana and Illinois before moving to Arizona. Five years ago, he and his wife bought a $330,000 home with two bedrooms and a den and then spent an additional $70,000 improving... [more]

With all the evil banker stories it's important to remember the housing crisis was also made possible by Les Meyers & Tom LeTendre. ------------------------------ Les Meyers, 74, spent a half century in real estate in Indiana and Illinois before moving to Arizona. Five years ago, he and his wife bought a $330,000 home with two bedrooms and a den and then spent an additional $70,000 improving it. In December, his lender agreed to a short sale of the home for $229,000. In 2005, Meyers says he made about $300,000. This year, having returned to his roots as a real estate salesman, he’ll be lucky to make $35,000. He filed earlier this month for personal bankruptcy. “We’re starting over. We don’t have a nickel of any asset other than a car my wife owns,” he says. Blaming Wall Street The experience has left him bitter and broke. Meyers blames “thieves” on Wall Street who have corrupted the political system and left homeowners stripped of their principal asset. --------------------------------------------------------------- Tom LeTendre, 47, a food services warehouse operations manager, and his wife Diane, 50, lived well in the years after their 1998 purchase of a $98,000 home on the west side of Phoenix. “We were very comfortable. We went to dinner when we felt like it. We bought the things we needed to enjoy life,” he said in an interview. Repeated Borrowing Over the next few years, as home prices rose, the LeTendres repeatedly borrowed against their home. They refinanced into an adjustable-rate mortgage for the final time in 2006, a year that saw Phoenix prices jump more than 40 percent. Today, with an annual household income of about $80,000, they owe about $260,000 and have stopped paying their mortgage. Homes in their neighborhood have sold recently for $45,000 to $65,000, according to Zillow.com. Dental Bill As recently as 2007, the LeTendres used their housing equity to pay a $25,000 dental bill, fund a Caribbean cruise and cover thousands of dollars in home improvements. Tom LeTendre, now hoping his bank will permit him to dump the house for whatever the market will bear and walk away, was a regular customer at the local Home Depot, spending freely as he took down an interior wall, extended a carport roof and did some cabinet work. He rarely patronizes the store these days; on his last visit, he spent $8. “My outlook on a lot of things has changed,” he said. “I don’t need an iPad. I don’t want to give anybody my money for something unless I think it’s worth it. I’m very reluctant to buy into the commercialism.” http://www.bloomberg.com/news/2011-04-27/phoenix-underwater-mortgages-show-housing-s-threat-to-recovery.html [less]