Couple Takes Hit from Mortgage Business in Orange County, California

California, in general, is known as somewhere where many people wish to "wind up" housing-wise. The young may want a condo or loft as a "first" venture into real estate. People who are ready to "down-size" might want the same to be able to travel, stop the weekly yard work and shake up their golden years. Many do not mind or care if the new abode is seaside or smack in the middle of the desert.

Four years ago, Sarah and Alex (names have been changed), were very young, newly engaged and neither earned enough to afford married life. Since Orange County (and neighboring Los Angeles County) were in a "boom" market, they decided to become real estate underwriters. For the price of one class for $600.00 and one month of their time for evening classes, both got into the busy cash-producing world. Being young and strong-willed, they didn't listen to their parents about banking one salary and living below their means.

Both wanted everything-NOW. They both worked for the same place, lived with one set of parents and lived "high on the hog" as their grandparents generation would have put it. They got married and lived in Alex's late grandmother's pre-war Long Beach home, renting it from his mother at a very low rate. They still refused to put anything away. More often than not, they spent weekends taking nights at luxury hotels, bought a vacation time share, went on several cruises-all during the first year and a half of their marriage.

The young couple were earning over $130,000 a year for three years in a row-when suddenly the market went from "boom" to "bust!" And again, they had not put anything away for a rainy day.

The realization that "parents really do know best" hit hard and way too late. The firm they worked had been down-sizing various departments, but the young couple didn't take heed. They kept spending as much as they were earning. Now they wanted to start a family. Even though they were warned that the firm would be closing one of their departments entirely and one of their former employers went out of business, they pushed forward with all but one plan: they didn't buy a house.

Three weeks after announcing her pregnancy, Sarah was laid off. One month after that, Alex got the proverbial boot. Then the business folded. Sarah's pregnancy turned high risk and she was put on bed rest. Alex tried every contact, job fair and remaining real estate brokerage firm he could think of-several times over. None were hiring-most were laying off or going out of business.

Fortunately they had unemployment, but COBRA payments for just Sarah were eating up a good portion of those payments. The house that was in complete disrepair, too small and in a bad neighborhood, was now a bonus. They were paying 1/2 of what the going rate for rent was to Alex's mother. It took a year and three months for Alex to find another position-only to lose it a week before his benefits were about to kick in. Alex had now been without medical insurance for almost a year and a half! They were now paying for a private plan for Sarah and their new baby-lower than COBRA but still more than they could really afford.

Thankfully, Alex found another job within three weeks, but they also found out that Sarah was pregnant again. While they are happy with the surprise news, they are very worried. They still had no savings, the house they are in is already too small for the little family and Alex is barely able to pay their set bills. Both of their parents are hard-working baby boomers who would love to help as much as possible, but their budgets are tight as well.

Although they fortunately do not have a home loan of their own to contend with, the downturn in real estate has definitely made this young couple grow up fast and hurt their chances to get out of the "hole" they are in. They've decided their only chance at living in a decent neighborhood, in a decent size home is to leave all their family and friends behind and move out of state. They will have to work way out of their field of expertise until the market improves.

It is the hope of all concerned that if they move, they will be able to survive the new surroundings, job availabilities, unknown health care situation and lack of physical support that they have come to count on from relatives.