Homeowners who shouldn't have gotten a home.

Discussion in 'Economics' started by Sikhinvestor, May 19, 2009.

  1. As Real Estate Income Plummets, Couple Fight to Hold on to Home

    Published: May 14, 2009

    VICTOR and Belkis Abreu may be losing their honey-colored contemporary on a leafy street called the Boulevard to foreclosure, but the odd thing is that in good times they derived most of their income from the real estate business.

    “That’s how we live, that’s how we pay our bills,” said Mrs. Abreu, an amiable dark-haired woman in her late 30s.

    Mr. Abreu, 39, like his wife of 20 years an immigrant from the Dominican Republic, was a contractor who dabbled in real estate, fixing up neglected homes in Ossining, Yonkers, the Bronx and elsewhere and reselling them. In some years, Mrs. Abreu said, he would make $150,000 to $200,000 a year, and that was supplemented by the $38,000 she makes as a property manager for the I.B.M. Learning Center, a conference center in Armonk.

    The Abreus bought the four-bedroom house where they still live in August 2006 for $1 million, with Mr. Abreu thinking the pending opening of the 40-story Trump Plaza condominiums — visible from their front steps — would significantly increase the house’s value.

    The Abreus, like several of their neighbors in the Rochelle Heights neighborhood in New Rochelle, bought their house as speculative opportunities rather than long-term residences, hoping their value would go up so they could sell them at a sizable profit. Sometimes these homeowners refinanced one appreciating house so they could buy a second, collecting rent from one and living in the other.

    But when the economy fell into a deep swamp, at least four of them were left facing foreclosure, including the Abreus.

    Not only did the Abreus see the value of their own home plunge. Their income also fell because buyers could not be found for Mr. Abreu’s fixed-up homes, and some of his customers, like a doctor for whom he built a new clinic, stopped making payments. As a result, Mrs. Abreu said, he could not come up with the money to meet the $9,700 monthly mortgage payment on his own home.

    “I try not to think about it because I have three kids,” said Mrs. Abreu in her plushly furnished living room. “I don’t want to lose the house. When I see another month added to what we owe, I get worried about it.”

    Mrs. Abreu said she is also three months behind in the payments on her 2005 Toyota Camry because she needs the money to pay her children’s tuition. She and her husband have taken low-income government grants and loans to pay their 19-year-old daughter Arleny’s tuition at Mercy College, but they still have to pay tuition for the two teenagers attending private schools in Yonkers. They have stopped taking vacations like they ones they used to take to Orlando.

    “We used to get new coats every year,” she said. “Now we don’t get new coats.”

    While not taking vacations, Victor, though, is making trips to the Dominican Republic to drum up business that will increase his income. In the meantime, the Abreus are trying to renegotiate the terms of the mortgage.

    “We have attorneys and everything,” Mrs. Abreu said
  2. there's more to that story, they're probably hiding a good percentage of the money they had made somewhere