Homerefinance May 8, 2008
Posted by janey in : bad credit loans , trackbackYou can’t make this stuff up: Former major league baseball player Jose Canseco, pictured, “said on Thursday he had lost his California mansion to foreclosure — one of the first celebrities to publicly admit being a statistic in the U.S. housing crisis,” the Associated Press said.
In comments to the TV show “Inside Edition,” Canseco says, “It didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else.”
Check out this item in the L.A. Times. Admitted steroid abuser Jose Canseco stopped making payments on a $2.5 million mortgage after his house began losing value.
In comments to the TV show “Inside Edition,” Canseco says, “It didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else.”
Translation: I decided to breach my moral and legal obligation to repay money I borrowed because I stupidly paid too much for the house. And there’s no such thing as debtor’s prison anymore.” Thanks to Calculated Risk for the link.
Mr. Canseco, a one-time American League most valuable player who ignited controversy by later admitting he used steroids and accusing fellow players of doing the same, becomes perhaps one of the highest-profile homeowners to walk away from a mortgage.
“He made a mathematical decision and just let it go,” said Gregory Emerson, Mr. Canseco’s lawyer.
Mr. Canseco bought the 7,300-square-foot home in Encino, Calif., for nearly $2.8 million in 2005, according to public records. He transferred partial ownership to a trust last year, according to Mr. Emerson. That trust defaulted on mortgage payments in October, and foreclosure was recorded in February, public records show.
The house already had at least one lien placed on it, from the Internal Revenue Service, and a judgment stemming from a 2005 court ruling in which Mr. Canseco and his brother Ozzie were found liable for a 2001 brawl in a Miami Beach nightclub. Together, the liens and judgment totaled some $1.3 million, according to Mr. Emerson and Tina Cameron, Mr. Canseco’s real-estate agent.
http://www.revver.com/video/855555/refinance-recovery-in-sight/
http://www.revver.com/video/855566/refinance-mess-bad-in-ca/
Citigroup analysts, led by Rahul Parulekar, estimated that 1 million to 1.5 million borrowers could refinance to a FHA loan under the Frank proposal and a similar program offered by Christopher Dodd, chairman of the Senate Banking Committee.
Both bills seek to reduce foreclosures by giving homeowners a renewed stake in their properties. Falling home prices will result in more than half of all subprime borrowers owing more than their homes are worth by year end, exacerbating foreclosures that are adding to bloated inventory and pressuring prices lower, according to Credit Suisse.
The bills address “the real problem,” which “appears to be homeowners walking away from ‘upside down’ mortgages,” the analysts wrote in the research note. “The odds are that some version of these proposals will likely be passed over the next few months” and have an impact by year end, they said.
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