<p>I don’t understand how he could become an actual CFP that quickly, there are tons of classes, tests & work to get the official CFP designation, plus experience in the field. I assume the article is inaccurate on some detail there.</p>
<p>I recall the late 70s & early 80s, we bought our first house in 1983 in SoCal at 17% interest (:eek:) all because we would never again be able to buy a house there, because prices were going up & up & up. We did not suffer on that first house and actually made money on the 2nd, but paying that interest rate was painful, though I did not realise just how stupid that was until years later with a much lower mortgage rate.</p>
<p>I get the hype, I get the falling for the media induced frenzy, I even remember all the talk in SoCal in the late 70s telling people like my parents that they should leverage their equity and take out $100k, put $10k down on each of 10 rentals, etc. Maybe some one could make money doing that if they were lucky and had great timing and great cash flow, but it never made sense to me. </p>
<p>I will admit to having lost money in real estate in the early 90s (remember that RE market?), but it was losing money we actually had put into the property, not living on HELOCs & 2nds and losing my pride.</p>
<p>I don’t think I like this guy…I would never hire this guy…I would not do what he did…</p>
<p>But I am going to take a different tact…</p>
<p>This guy got a great deal…
And I can see why some people do these deals…</p>
<p>The guy buys a 500,000 house for nothing down…
What would have happen if that house went to 1 million…</p>
<p>that guy would be up 500,000 with nothing down…</p>
<p>That is a heck of a return…(theoretically infinite)</p>
<p>And what happens if the house goes down in value…financially nothing…he walks…
The guy was really in a no lose–situation…</p>
<p>You can see why people would do this…</p>
<p>The guy might not be such a moron…</p>
<p>I might change my mind…maybe I have to rethink this…maybe I should think about doing things like this if the opportunity ever arises…(I am not recommending this for anybody else. :))</p>
<p>I understand people might not get this, but how can you call yourself a ‘financial pro’ and assume there is such a market that doesn’t have down cycles? Since when does RE just go up up up indefinitely? Just step back for a minute and it makes no sense. Scary if this guy was in charge of other peoples’ money and not just his own.</p>
<p>bought a LV house in 2003 and sold in 2010 for the same amount of money, roughly $525,000? Less likely. LV had the largest price drop in the Western US, I would think the price should be lower than that. I do understand 2007-8 was the peak of the housing bubble and then the Lehman Brother’s bankruptcy. But the price give looks too high, you can pay that price for the 3500 sqft house in less desirable locations in Bay Area, why anyone would pay that for Las Vegas?</p>
<p>I thought when you agreed to pay a mortgage you have entered into a legally binding contract. If you fail to pay you are in violation of a contract.</p>
<p>The author somehow cloaked this in terms that by walking away from his mortgage he was putting his family first. Like the rest of us who honor the documents we have signed are putting our families second.</p>
<p>He and his wife made choices that I didn’t make. They had four kids, I only had two. I wanted more but I didn’t feel we could afford it. It sounds like his wife is a stay at home mother which is also a choice I didn’t have.</p>
<p>The author just sounds like someone who if he wanted something he helped himself. Then he turned around and walked away from a quarter of a million dollars of debt.</p>
<p>^^ No Pea, its more than A quarter of million. He owed much more than that, more or less like 3 quarters of a million, with negative amortization, I would think he had even owed more than a million. Plenty of ppl do that during those go go years. In retrospect, it seems silly, but when the home value increases $50K/mo, you would imagine you are above the clouds and are invincible.</p>
<p>This guy wrote a book about it, but isn’t America filled with people who presumed that their homes would be the cash cow and put nothing down on them and then cried poor me when their ‘financial bet’ went wrong.</p>
<p>Nobody gave me a portion of the money they earned when the economy was booming and they were selling their homes and walking away with huge equity.</p>
<p>I personally am completely fed up with being held financially accountable for the greed of this guy and everyone else for whom this ‘bet’ did not work out financially.</p>
<p>The BANKS did not give this guy 244,000. WE did- all of us who did not submit to greed, get over our heads… etc. That is the point.</p>
<p>In this case an economics reporter for the Times gets over his head…</p>
<p>
</p>
<p>… and also plans to write a book about it…</p>
<p>
</p>
<p>That was in May of 2009. Maybe the book helped him save his house. Hopefully he will approach future financial transactions with a healthy dose of fear.</p>
<p>A loan modification is most likely happen, they have legit hardships and the bank has to comply. Once that is done and if they still cannot keep up with the mortgage, then the bank will forclose. I have heard some one was in default for more than 2 years and did not get forclosure.</p>
<p>I live in a very small affluent area where everyone knows everyone’s business. Every day I see people like these guys - educated, send their kids to private school, country club members, the whole nine yards. </p>
<p>Their foreclosure notices are trumpeted in the paper for a few weeks, they walk away from their giant house and then rent some other mansion in the neighborhood. Meanwhile, their kids are still driving expensive cars and wearing $500 prom dresses. And the Moms are posting pictures of their lavish parties and vacations on Facebook.</p>