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How One Woman's Home, and Dream, Foreclosed
One woman's story helps us understand today's financial mess
By Laurel Jorgensen
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Posted Oct 26, 08 6:42 PM CDT
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(Newser)
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When a California woman bought a home 3 years ago, she had little idea that her mortgage would help drag down the nation's economy—and the world's, the Sacramento Bee reports. Erin O'Hagan and two family members pooled incomes to buy a $475,000 Sacramento home, and planned to refinance before their adjustable rate rose to 12.75%. "The first year was the best," she said.
Her bank, Fremont Investment & Loan, also benefited by selling her loan into a mortgage-backed security. A year later, O’Hagan faced financial woes, home values had sunk, and the security backing her loan was assessed as "credit watch negative." This year, the home foreclosed—and Fremont filed for bankruptcy. O'Hagan still fights tears talking about it. "You see how close this still is to the surface," she said.