A jaw-dropping statistic out today: 1 in 4 homeowners now owes more on their mortgage than the house is worth. Being under water on a home must be some kind of awful. Or is it? We have a good case study to discuss.
Christine Schoenwald is a comic actress, writer and director in LA. She also works as an accountant at a video store. Christine admits she used her home as an ATM – several times. She’s now defaulted on her mortgage and is in danger of foreclosure.
But she does have a job and despite her predicament, she’s trying not to walk away from the home. Last week, she invited some friends over for a concert benefit; a benefit for her mortgage. Among those friends was Marketplace Senior Editor Paddy Hirsch. He brought along his digital recorder and interviewed people. You can read and listen to the Marketplace Money story about it here, but below you’ll hear Paddy’s extended interview with Christine, some of which didn’t make air.
Paddy pushes her on the use of her home as an ATM:
Hirsch: Tell me about that process, was it easy to get those refinancings?
Schoenwald: Oh yeah, because I had a lot of equity in my house. This was before, you know, the financial crisis. So they’re always happy to refinance me, even though I didn’t make that much money, I didn’t have very much in savings, but they were always happy to refinance.
Hirsch: A lot of people would call that “using your house as an ATM.”
Schoenwald: Totally. Guilty as charged.
I’m guessing you’ll find some of her comments infuriating. Just warning you. But you might have a friend who’s in a similar situation. Would you come to their “Mortgage Aid” benefit and chip in?
Also, tonight on Marketplace, more on the psychology of being under water…
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