Please read this little story and tell me what you think:
Consider the plight of Stephanie and Bob Walker, who bought a $799,000, three-bedroom home in Los Angeles with a view of the Hollywood sign in 2006 but are losing it because last year Bob lost computer consulting work that used to pull in about $240,000 a year. Bob eventually landed a job paying $60,000, and Stephanie found work as a $13-an-hour temp, but it wasn’t enough to cover their mortgage and credit-card debts, which were swelled by about $130,000 worth of home renovations. They listed the house last year for an “optimistic” $875,000 but didn’t get any takers. After months of price cuts and threats of foreclosure from the bank, they’re days from closing on a sale at $700,000 that will assuage their primary mortgage lender—but leave them under pressure from other creditors. “We had no expectation things would come crashing down as fast as they did,” says Stephanie. “We had no one to blame but ourselves. We didn’t have a backup plan if he lost his job.”
The story is based on reporting by my BW colleague Brian Burnsed and appears in an article I wrote in the new issue of BusinessWeek. In some ways it’s a common-enough tale. What makes it unusual is that Stephanie and Bob Walker are … happy.
Yes, happy, at least if you can believe the blog that Stephanie keeps, called Love in the Time of Foreclosure. The blog covers a lot of ground, including what to get your spouse for a sixth wedding anniversary, for which the recommended gift is iron. Anyway, here’s how she describes the blog, which I highly recommend:
Two people deep in debt, working our way out and happier than we ever have been. What? Yes. In debt. Still happy. Happier, in fact. Strange? Not really. Follow us on our journey as we share our secrets with the world.
That strikes me as a healthy attitude. It’s basically: Yes, we made some mistakes. And now we’re paying for them big-time. But we’re not going to let this drag us down. Onward and upward!
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.