Death Becomes Him

From the LA Times, we have David Streitfeld writing about More Californians at risk of losing homes.

The number of Californians defaulting on their mortgage loans is rising rapidly, according to figures released Tuesday, providing striking evidence that more people are at risk of losing their homes.

James Brown, a 66-year-old retired insurance agent in Salinas, Calif., has a history of heart trouble. When he had an operation in 2005, he said, "the doctor gave me a 50-50 chance I'd die on the table. So I did a stupid thing: I refinanced the house."

Brown's goal in tapping his equity was to give his wife, Monica, a $100,000 cushion after his death. But he didn't read the paperwork carefully, and didn't realize that his monthly loan payment would skyrocket.

Right! So your solution to "help" your wife was to take on more debt?

Brilliant!

There was also a problem with the operation: It worked.

But Brown awoke to a different world. With the new loan, his payments went to $4,500 a month from $2,900. The $100,000 in equity he pulled out of the house went to his medical expenses and other bills.

The property has dropped in value to $750,000 from $899,000, leaving him without enough equity to refinance. He arranged to sell the place, but the prospective buyers couldn't qualify for a mortgage.

In September he gave up and stopped paying the mortgage. He's now in default, speeding toward foreclosure.

"Three times a week, they call and say, 'Where's my money?' " he said. "If I hadn't survived, everything would have been fine."

So if you had died, everything would be fine?!?

This is just sad! Plain sad!