The Alt-A downgrades are accelerating. It’s ugly.
I wonder what interest hikes by the FED will do to these bonds ?

Cut to present day: yes, their home in southern CA has lost considerable value. However, because they have been homeowners (responsible ones, that is) for so long, the recent drop in home values probably spiked their LTV from about 25% during peak value times, to MAYBE 35% on the high side based on current values. They still have a nice sized chunk of nest egg left in that home.

So, it always baffles me when I hear about baby boomers who have “lost everything” in the past year or two. Did you get such a late start that you’re more readily likened to the recent 1st time buyer with no money down, or were you simply caught up in the credit-addicted customs of our society and lived above your means? I thought that was an affliction mostly suffered by the younger generations and that most boomers were still relatively conservative when it came to living on credit and above one’s means.

“I will start by saying I’m afraid. If my business associates, my younger brother, my daughters or even my now passed mother and father ever heard me say this they would each be shocked – maybe frightened that I would be afraid. But I am. I live inside the beltway in Washington DC. I am a prosperous consultant with a nice income and a 12 room McMansion on a half acre with pool and spa. There is only my spouse and myself at home. For many years we supported an invalid relative who lived with us until her recent death and were in the process of selling our home to buy a smaller one that would still enable us to care for our relative in her final years – she fell and died at age of 90.
Our Zillow Appraised home is $1,877,000 and the smaller one we purchased was $1,300,000. The fiction of these numbers became clear when the real estate agents started with appraisals on our larger house at $1,250,000. A number recently confirmed by our new tax assessment which dropped $600,000 from last year.

The new smaller home we closed on is down over $350,000 and our loan payments on both properties take all our disposable income.

Situational reality has taken me to bk attorneys – $2300 down a rat hole. They know less about Chapter 7 for folks like me than I do. Hell around here they don’t even know how to determine solvency for IRS standards. Their total ignorance on the subject is due entirely to this areas late experience with the credit implosion. How many others like me are out there in DC and Potomac and Fairfax and Greatfalls I don’t know. Maybe there are many All vastly upside down – insolvent not by thousands but by hundreds of thousands and at retirement ages with little chance of recovery.
My neighbors don’t even know we moved into a 2 bedroom apartment in Arlington – we did it before our credit collapsed due to non payment of the mortgages. I even bought a Honda Fit – after not owning a car for five years and tried to take care of the many other issues soon to be faced when my FICO is closer to 290 than 700 and even using a credit card to book a hotel room will be a problem.
At some point my family will discover that my retirement hopes are gone and except for what income savings I can hang on to between now and 65 will be all that keeps me and my wife alive along with any social security payments we may have earned along the last 45 years.

This situation – of our own choosing by the way – we blame no one other than ourselves for not factoring in this horrendous collapse in real estate values – But we have basically lost our most precious possession – not the furniture, the big house or the lost retirement income held in our vanished home equity.
What we have felt as our biggest lost is a past – a past made of wonderful years together believing if we lived right, saved our money and kept it in real estate then we could imagine a bright future. We have lost that future. How do other people handle this? That’s my question to you Mr. Mortgage.

When I get up I no longer fill the thrill to start my 6am workout – my 3 mile run and weights. My great health at age 62 now seems sort of pointless. I no longer think of the wonderful country we live in and the great life I have lived even counting those 3 bad years in 68 as an Army Lt. Instead I am just sad.

Again, thank you for having the guts to tell the truth and make the evidence known. Keep it up and I will keep reading your lines.
Last of the LT’s.