I don’t quite get the housing industry debacle. My family recently went through the foreclosure process here in AZ and did so purely as a business decision. When the house went up for sale as a Short Sale, it was listed at 42% of the price we purchased it for in 2006. Yes, 42%. In the end, Becky and I asked each other if the house was our dream house because we would need to be buried in it. In actuality, the house was meant to be a starter home, gain some equity and build for a future. That dream failed when the banks started lending to anyone with a pulse.
So today, we are in a beautiful home (rented) for the next few years as we get our credit back in place and can obtain an FHA backed loan. Our next home we will not make the same mistakes (hopefully) and intend to be there for more than 5 years.
Back to the industry, I’m pissed at the banks for lending to anyone and everyone. I’m pissed at the people that knowingly couldn’t afford an increased payment and put all their hopes into the house gaining value and refinancing. I’m also pissed that I didn’t take a step back from the purchase process and release ourselves from the “gotta get a house quick” feeling that was sweeping through Phoenix. We’ll learn from it.
Finally, Arizona is a anti-deficiency state meaning any debt associated with our home purchase money is cleared and cannot be sought out by collection agencies, etc. Great law for our family, but our decision didn’t help the economy and for that I feel slightly guilty. I’d feel more guilty if I believed the banks felt bad for us.
At the end of the day, my wife and I enjoy two wonderful kids so where we live and what our credit score is doesn’t really seem to matter much. Except, Becky would like a pool…
Here is a picture from our balcony this morning.