Sunland, Ca - Every house for sale has a story behind it, but CNN decided to tell the story of a local San Fernando Valley couple on the brink of losing their home. What makes this story so special? Is it a unique event or telling of a general trend of tapping equity and then getting tapped out after living for years beyond their means?
Zillow shows a unremarkable house right next to the Tujunga wash purchased for $258,500 in September 2002. The current listing shows a house on the market for 59 days reduced down from $649 to $629k. So far pretty unremarkable. But to read the story of the couple who live here, they are tapped out. They pulled out $300k to start a Juice it Up! franchise (which requires between $235k and $283k for startup costs according to their website), bought a boat, 34 foot RV, remodeled their house (kitchen, floors, carpet) and are shown with a mountain of bills and no more equity to tap. They have even taken out loans on their paid of vehicles to pay the bills.
THELMA GUTIERREZ, CNN CORRESPONDENT (voice-over): Christmas season at the Basore home. It was supposed to be a time of joy.
MARY BASORE, HOMEOWNER: This is probably going to be our last Christmas here.
GUTIERREZ: Mark and Mary Basore had planned to raise their son in this Sunland, California, home. It represented their future.
MARY BASORE: We did the new floors, new carpet.
GUTIERREZ: They bought the house four years ago. In that short amount of time, their home more than doubled in value. Things never looked better. (on camera): You guys were sitting on a mountain of equity.
MARK BASORE, HOMEOWNER: I know.
GUTIERREZ: Right? You had, what, $300,000 equity.
MARY BASORE: We were sitting on a mountain of equity. And that's where the dollar signs, you know, we could do it on our own.
GUTIERREZ: They wanted to start a business. So they did what a lot of people do, they took out a home equitiy loan. The Basore's pulled out everything, $300,000. UNIDENTIFIED FEMALE: Got free samples today.
GUTIERREZ: And they opened a Juice It Up franchise in Valencia, California. But the spending didn't stop there.
MARY BASORE: We decided let's just buy a little $5,000 boat.
MARK BASORE: Taking friends out to dinner, you know on a Saturday night or something. Just because we have all the money in the bank.
MARY BASORE: This is my 34-foot RV that I love.
GUTIERREZ: And they remodeled their house. But their new business was slow to start. And money wasn't coming in.
MARY BASORE: We refinanced and took the cash out. Came up short. Refinanced again to get some more money out and then after that money, we came up short, too.
GUTIERREZ: So they took out loans on their vehicles which had already been paid off and they racked up more credit card debt. What is the pressure like when you have all these mounting bills?
MARY BASORE: I just -- I just don't want to look at them. They're not going to go away.
GUTIERREZ: Now they're dangerously close to foreclosure. Their only choice, to sell their home in a California market that's cooling down.
MARY BASORE: This is my ad on Craig's List begging people to come look at my open house.
GUTIERREZ: You used the word begging.
MARY BASORE: Begging. Literally. In capital letters, owners are desperate, must sell. GUTIERREZ: Was it hard when you put up that for sale sign?
MARY BASORE: Yes.
MARK BASORE: I just came out and almost hit the ground. Oh, no! My house.
GUTIERREZ: The unfortunate irony, Mary is in the real estate business. She's a loan processor. You're around the business and yet it happened to you.
MARY BASORE: Just like everybody else, saw the equity. Saw the future, the cash we could use.
GUTIERREZ: The Basore's say they learned the hard way to live within their means. But they still have faith in their business. And that maybe their home will sell before the bank takes it away.
MARK BASORE: We will get through it.
MARY BASORE: We will get through it.
GUTIERREZ: Thelma Gutierrez, CNN, Sunland, California.
Things aren't looking good for Mary and Mark, Zillow indicates that the house directly across the street from them sold for 455k on 11/30/2006.
This isn't the result of a toxic loan or someone losing their job or getting divorced, this is simply people living beyond their means and the banks happy to give them the money. So the question I leave for you as we await RealtyTracs next foreclosure report, Just how often was is this story repeating across Southern California right now?
1 comment:
Oh yes, they'll get through it .. yes they will ...
Lets see ... their Juice business is prolly pulling in $$ now, its prolly free and clear in a distant relative's name ... and the bank gets handed the dump of a house ... which they cant unload for 400 ... yea they'll pull through ...
BTW that dump was over priced in 2002 ... at 629 ... its over priced if it was a hidden diamond mine.
Cool.
Cow_tipping.
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