Sunday, December 16, 2007


Not everyone dinged by the housing crisis is a purely innocent victim. People should have been able to recognize that when the cost of owning (mortgage payment+etc) was much greater than potential rental income, that maybe these hot investment properties weren't so hot after all.

The Marin resident, Rose Hodges, said she attended Marin investment clubs and met many people like herself who wanted to learn how to invest in real estate.

"All these Baby Boomers started inheriting money from their parents and looking for ways to invest it. And the real estate market was booming," said Hodges, who learned the hard way that such investments can have a big downside. "It's crazy out there and people ought to know."

Medina, who got a real estate license early this year, said he dabbled in real estate for years and made some money before gambling too big and buying 11 properties at virtually the same time in early 2006.

He said he lost the luxurious, six-bedroom house he was occupying in addition to 10 others he was trying to sell, plus most of the limousine business he had been running for years. He said the financial mess has left him penniless, facing bankruptcy and lawsuits, and saddled with a $3.6 million tax bill.

A few years ago a light went off in my head when someone suggested to me that inheritance was the way that a lot of people were able to afford what I would've thought were unaffordable homes. Though I hadn't yet realized that lending standards and practices had gotten to be completely horrible as well.