On Monday, the L.A. Times published the first installment of a four-part series called “The Foreclosure Front.” It looks like four California areas hard-hit by the housing crash will be profiled. First up: La Quinta, in the desert of eastern Riverside County.
Like a lot of houses here, the Spanish-style five-bedroom Gary and Debra Magsam bought three years ago has a sparkling pool, a designer kitchen and a nearby golf course.
Now it has one other feature common to the area: a foreclosure notice. Barring a last-minute reprieve, the Magsams’ house will be auctioned June 27. They’ve begun to pack.
There’s nothing unusual about the Magsams’ story: Like so many others, they kept trading up and refinancing, believing that their house value would always keep rising.
The sad thing is, when the Magsams arrived here from icy Wisconsin in 1999 and fell in love with the warm, sunny desert, they bought a house for $140,000.
If they had held onto that house, not taking any money out of it, it’s likely their money problems would be non-existent today.
If only they had walked away from the craps table right then. But they rolled the dice again, paying $685,000 for the house they’re now losing. The story says they took out a first mortgage for $537,000 and second mortgage for $100,000. You can fill in the rest of the story.
To their credit, the Magsams aren’t blaming anyone but themselves for their predicament.
“The banks loaned money to all kinds of people they shouldn’t have, including us,” Gary said. “This situation we’re in is one of our own making. We were not taken advantage of.”
The Magsams optimistically say that they’re still young enough — the story says Gary is 48 — to start over. But if they had resisted the urge to trade up and had held on to House No. 1 — or even House No. 2 — they’d have a manageable mortgage payment with plenty left over to invest in their futures.
They’ve learned from their mistakes. Maybe others will too.