Monday, September 7, 2009

Equity Victims?

In July, A Fortiori, who could not be reached after several attempts, informed the Kempffs that they would not receive a loan modification. A OneWest Bank spokesperson said the Kempffs didn't qualify for a loan modification because the amount they owed on their first mortgage was more than $729,750.

The unpaid amount on the Kempffs' loan is $786,802.59, short of qualifying for a modification by about $60,000.

On the date of auction, Lois Kempff approached the auctioneer with proof of bankruptcy and her property's auction was postponed until Sept. 21. Had the auction proceeded, the beginning bid for their home would have been $433,000. They originally bought their home for $430,000 and estimate that it's now worth about $550,000.


This is a story about a family that claims they are victims. These victims extracted $350,000 out of their house in six short years from 2002 to 2008. It might actually have only been five years, it is tough to determine from the article. In six years these "victims" extracted $60,000 post tax dollars per year. That is also approximately equal $100,000 pre tax dollars per year. In other words, their home was the third income earner in their household. In fact, their home may have been the primary income earner in the household.

For those who believe economic recovery is just around the corner in Cal consider how many of these income earners need to be added back in to grow the economy.

The other key point is seeing they are not eligible for refinance cause they needed more than the max conforming limit. Fannie and Freddie may be wards of the state, but it is good to see it has not stopped them from making loans that cannot be repaid.

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