We’ve chattered many times about how it is (or isn’t) “different” in some neighborhoods or towns because wealth in those areas would insulate them from the housing bust.
We’ve debated whether prices would fall in the Greenzone or in exclusive communities on the North Shore- or if they did- if the declines wouldn’t be as severe as other areas.
Thanks to the reader who posted a link to this excellent Wall Street Journal article discussing case studies of homeowners around the country who lost their homes to foreclosures from all different income levels and neighborhoods.
Mentioned in the article is a couple from Kenilworth who bought a 5-bedroom vintage Colonial home at 620 Abbotsford Road in 2004 for $1.31 million and lost it to foreclosure in August 2010. (By the way- Bank of America had the loan.)
Kelli Kobor and her husband thought they were making a safe investment in 2004 when they made a $350,000 down payment on the $1.3 million purchase of their five-bedroom Dutch colonial in Kenilworth, Ill., a wealthy suburb on Chicago’s North Shore.
Ms. Kobor and her husband have no other debt. They never refinanced or took out a second mortgage. But like many other Americans, they ran into trouble making their mortgage payments last year after Ms. Kobor’s husband lost his job and later found a new one that paid much less.
Their home had fallen in value, wiping out any equity and making it impossible to refinance. Ms. Kobor wasn’t eligible for the government’s loan-modification programs because her loan was too large; her mortgage servicer offered a six-month interest-rate reduction that tacked the payment shortfall onto their loan.
Tired of feeling “strung along,” they ultimately surrendered the home to the bank in what’s known as a deed-in-lieu of foreclosure, and moved out in August. They now rent a three-bedroom ranch-style home in Deerfield, about 10 miles away.
Moving her family was a “very difficult choice, a very difficult transition,” says Ms. Kobor, 43. She still takes her son to play with his best friend and former neighbor. “Every time I drop him off,” she says, “I have to look at my house.” The home was listed for sale last month at $749,000.
Ms. Kobor and her husband are saving to buy another home, although this time they’ll approach home ownership differently. They will take out a smaller loan, one they can repay within 10 or 15 years. “We will never leverage up like that again,” she says.
But the biggest surprise over losing her house is that “our lives are so much better now,” Ms. Kobor says. “The relief of knowing that we are not in a bottomless hole that we’ll never be able to climb out of—psychologically, it has been great.”
The house sold on December 29, 2010 for $650,000, or about 50% under the 2004 purchase price.
Built on a 60×150 lot, it had a 2-car garage and central air.
It had hardwood floors throughout, stainless steel appliances in the kitchen and a full finished basement.
Did someone get a deal?
Or is this just a return to the norm- even in Kenilworth?
Michael Olszewski at Area Wide Realty had the listing. See the pictures here.
Faces of the Home Foreclosure Crisis [Wall Street Journal, Nick Timiraos, December 29, 2010]
620 Abbotsford Road in Kenilworth: 5 bedrooms, 2.5 baths, 2 car garage, 2289 square feet
- Sold in January 1991 for $520,000
- Sold in June 2004 for $1.31 million
- Lis pendens filed in June 2010
- Bank owned in August 2010
- Originally listed in November 2010 for $749,000
- Sold on December 29, 2010 for $650,000
- Taxes of $21,468
- Central Air
- Bedroom #1: 15×17 (second floor)
- Bedroom #2: 13×14 (second floor)
- Bedroom #3: 11×12 (second floor)
- Bedroom #4: 10×17 (third floor)
- Bedroom #5: 10×15 (third floor)