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http://tinyurl.com/6daws7Housing bets gone bad By CHRIS SERRES, Star Tribune Last update: April 21, 2008 - 10:05 AM
About this series: Just two years ago, Wright County epitomized the American dream of home ownership. Young families went there in droves, attracted by the cheap land, good schools and bucolic neighborhoods. But today, that dream is unraveling, as foreclosures rip through Wright County neighborhoods at a rate of 23 a week. What happened?
In the rush to find blame for the nation's current housing crisis, the easiest targets have been the lenders and mortgage brokers who peddled predatory loans. But across the country, from the desert suburbs of Las Vegas to the treeless subdivisions of Wright County, many homeowners face a predicament of their own making.
They gambled big that housing prices would continue to shoot up. Some bought homes as often as others buy new jeans, occasionally in return for thousands of dollars in kickbacks. These investors ranged from small-town working people looking for a quick payday to sophisticated real estate professionals who bet with other people's money, occasionally defrauding lenders in the process.
Now, with home prices falling and mortgage payments rising, panic has set in. Investors are dumping houses on the market before prices collapse further, or simply turning the keys back to the lender. That, in turn, is dragging down values for even longtime homeowners, wiping out the equity they'd built up over the years.
In Wright County, the number of unsold houses on the market has swelled to more than twice the national average. Officials estimate that up to half of all houses that have gone into foreclosure during the past year are owned by investors. "You had people buying houses here that they have never even seen," said Dean Zachman, a sales agent for Edina Realty in St. Michael. "They took bets that, in hindsight, seem reckless."
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