Emergency Fund To The Rescue
Read on to see how this family's hardship could be avoided, but there is more to the story.
As featured on CNN, Patricia Guerrero was making $70,000 a year and weeks later, with bills piling up and in need of food for her family, this middle-class mother did something she never thought she would do, she went to a food bank. What a sad, sad story.
If she had a fully stocked emergency fund of 3-6 months worth of expenses set aside in a savings or money market account, she would not be in such a tight fix.
Now for the rest of the story. Someone looked up Guerrero on the LA county assessor and recorder database. They found more information about Guerrero’s financial situation from public records.
The almost 3,000 square foot house sits on a quarter acre lot and was built in 1948. She and her estranged husband Ray acquired the house, apparently from his parents in August 2002, at which time the debt on the property was about $157,000.
Ray and Patricia took out a conventional fixed-rate first trust deed on the property in August 2002 for $202,000.
Between 2002 and 2006 there were various refinancing and equity loans, but the present note from August 2006 is for $649,999.
So, in the end they bought the place for a song and blew about $450,000 equity over a period of just 4 years. In CNN's effort to create more panic about the hosing market than there really is, they got scammed themselves.
Labels: CNN, emergency fund, Mortgages, Patricia Guerrero, Scam
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Posted By: Joe on Wednesday, April 02, 2008
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