The WSJ reports: From Ordering Steak and Lobster, to Serving It.
Carlos Araya used to order lobster, filet mignon and $200 bottles of red wine at the Palm Restaurant in midtown Manhattan.
Now, he seats customers at its Tribeca branch.
Mr. Araya, 38 years old, lost his job in 2007 as a crude oil trader on the New York Mercantile Exchange. After visiting dozens of headhunters with no luck, he applied in August 2008 to be a host at the Palm to support his wife, two young daughters and mortgage payments. His salary has plunged from $200,000 to $25,000.
Last month, for the first time, the Arayas didn't make a mortgage payment. Their savings are almost depleted. The mortgage, taxes and fees for the family's condo cost $6,200. Combined, he and Denise bring in $4,000 a month. Three months ago, he and his wife applied to restructure their mortgage. The bank told them it is still processing the request. They fear foreclosure and bankruptcy.
Mr. Araya, the son of a cab driver, grew up in a working-class neighborhood in nearby Queens. Like thousands of New Yorkers, he used a Wall Street job to vault into a comfortable lifestyle that included his apartment -- bought for $960,000 four years ago -- in Manhattan's Battery Park City neighborhood and family vacations to Cabo San Lucas, Disneyland and Las Vegas.
The Arayas purchased the condo in 2005 with a 20% down payment and a pre-construction price. The proximity of the two-bedroom, two-bathroom apartment to the trading pit allowed Mr. Araya to spend more time with his family and less time commuting. Ms. Araya diligently managed the family budget with Excel charts to ensure that they had no credit card debt, good credit histories even an emergency fund saved over five years that is now depleted. Mr. Araya says he would be lucky to find a buyer and break even on the apartment now.
$960K for a two-bedroom.
Carrying cost = $6,200
Monthly income = $4,000
Stupid is as stupid does.
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