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Wednesday, February 06, 2008

 

'I Stopped Paying,' Says LA Writer

CNNMoney.com quotes an anonymous Los Angeles writer today who says he's just going to walk away from a mortgage that's become too costly.

Unfortunately, CNN does not tell us who the writer is, although it hints that this was investment property (he apparently bought two properties in Hancock Park with the intention of flipping them quickly). CNN also doesn't tell us what kind of writer this guy happens to be (journalist? author? screenwriter?), or if he's a member of the Writer's Guild (and therefore on strike). There's a lot that's not there, including a reason to feel sorry for someone who appears to have known the stakes when he pushed his chips forward.

From the story at CNNMoney.com:
NEW YORK (CNNMoney.com) -- Mortgage payments are set to jump. Home prices have plunged. "I'm outta here."

Homeowners are abandoning their homes and, more importantly, their mortgages, rather than trying to keep up with rising payments on deteriorating assets. So many people are handing their keys back to lenders that a new term has been coined for it: jingle mail.

"I stopped paying my mortgage in October, after shelling out about $70,000 in interest [over 15 months]," said one borrower, David, who doesn't want his last name used. "Now, I'm just waiting for the default notice."

The Los Angeles-based writer bought two properties in Hancock Park, west of downtown, using no-down, interest-only mortgages in 2006. He paid just over $1 million for both.

David had planned to sell them quickly but got caught in the slump. Soon his interest rate will jump by a few points, and his payments will go up by several hundred dollars a month for each place. He figures his properties have fallen in value by at least $60,000 each.


— TJ Sullivan in LA
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