True Cost of bubble real estate and the credit bubbles

[Taipan]

For the last 4 years I have been warning anybody that would listen about the brutal reality and cruelty of this credit bubble which has caused your housing bubble in Vancouver.

That going into such massive debt would end up killing people. People would end up committing suicide.

Meanwhile we have an industry that is very greedy, and will exploit anything to keep those prices rising and the stock ticking over.

Today - I cruised past Garth Turners blog - and BTW I think he is optimistic, and saw this.

She was hitched then divorced, in Edmonton. “Disastrous,” Aggy describes it. She signed over the marriage house then limped back to BC, broke and broken. Lost her kids. Lived for three years in a co-op, found a job and managed to crawl out from under her Visa bill. “Now I’m just another idiot,” Agatha says, “to add to your collection.”

One afternoon in 2007 she sat looking out the window of a Starbucks in Vancouver. “In walks a dashing dynamic realtor, owner of a major local agency… starts chatting… two days later, in a haze, I find myself ‘owning’ a condo… zero down, 40 yr amortization, $247,900 plus the 10K CMHC fee. Nice place, near where I was living, near my kids and grandkids, familiar trails for the dog, etc etc. Five-year term is up now. I owe 245. Could sell it for 240 if lucky and act fast.”

She wrote me tonight.

“I feel I need out NOW, at age 58, and switch to renting, but no idea how to get out of my situation. Should I ask the bank if they would please repossess and accept the shortfall, which I could at least cough up? My job is maybe good for a year, but that’s about as long as I think I can survive the stress of this career. I want to find a way out, without choosing the ultimate out, which believe me, has been on my mind this past year — it scared the poop out of me, to realize that the mind can even go that way. Now at least I understand people who succumb. I will survive. If only I could think clearly about my situation!!

Just another idiot
And that is why I have bothered to try and warn people about the dangers of excessive debt and this property bubble. Too many people saw this as a quick way to security.

It wasn’t and isn’t. It was a quick way to massive debts, misery and pain. I know what its like to suffer under massive debts and it isn’t fun. I worked my way out. Most people never will!

I see ratty going on about opportunity loss of not having been in the market! What about all those people who should never have been in the market in the first place like this poor lady.

Where's her increase over the last 5 years ratty? Doesnt sound like its happen to her!

She should never ever been put into a mortgage like that. These are the liar loans that supposedly didn’t exist in Canada. And what idiot gives a 53 year old woman a 40 year loan.

From now on, you will start to see more and more of these. More suicides, more broken families, more destroyed lives.

Coming to a site like this all they ever got was buy buy buy. The mania was palatable. At least a few of us have and continue to warn people to beware.

To that group who are greedy speculators - well it’s called risk and reward. If you haven’t taken the reward by now, then your 100% exposed to the downside risk. And tough!

[FuturePorscheOwner]

Taipan, this is an unfortunate situation, I definitely feel suicide is never a way out. Money comes and goes, but a real measure of a person is if they can triump their obstacles. Hopefully this lady in this article is able to come out of it.

Death has to be easy, because life is hard - 50 Cent.

[Taipan]

Bump

This is what happens when you put money before everything else. You destroy peoples lives. Who was the real estate agent. Maybe he posts on here, trying to keep pumping the market.

[tdma800]

the Garth guy isnt even in BC

[fishguy15]

the Garth guy isnt even in BC

No, but "Agatha" is. That's the point.

[timber2012]

the Garth guy isnt even in BC

Yes - it's different in BC

[instigator]

better to die in bc than alberta

[timber2012]

better to live in Alberta than die in BC

[thirdlittlepig]

I don't see the realtor as being the bad guy here. The lender is the one who put this woman in a horrible position. Why would they give her a 40 year loan, and zero down? That's not the realtor's fault. Now she should have her head examined because at 53 she didn't just fall off the turnip truck. If she declares bankruptcy might be the best option (better than the alternative) since she doesn't want to own subsequent to this. I think the lender had the obligation of sitting down with her and showing her how much equity she would have after five, ten years, etc. and what her payments will be if rates up a couple of percent, if market stagnates and place is worth less,or she becomes ill or can't work, etc. especially for a single person who does not have a cosigner or spouse to help out. Any mortgage is a lot for a single person to bear the burden and risk. There's more regulations and skill checks if you just want to drive a car than there is for signing up for forty years of debt. Too bad her parents didn't educate her before they threw her out into the world. Unfortunately I think there are hundreds, thousands, like her and in the same position, so at least she should know she's not alone.