Pugh facing foreclosure on Brush Park Condo

[Neilr]

I can't really be too disappointed in him walking away. He doesn't really have options.I am amazed, however, that folks were paying 400k for cheap looking suburban-style townhouses back in 2005. 80k sounds about right for one of those. Maybe even a little on the high side.

IIRC, Pugh bought one of the restored/renovated townhouses on John R. These are some of the most unique, nicest [[IMO) townhouses in metro Detroit. And, when they came on the market, seemed to be worth the price.

[Cincinnati_Kid]

Its disgraceful that the city council president in one of America's biggest cities is so poorly prepared to manage finances.

Detroit is no longer considered one of America's biggest cities. It has been surpassed in population by Indianapolis and Columbus, and now is the 4th largest city in the Midwest, when it used to be the 2nd largest. Detroit is the 19th largest city in the US, just 30 years ago it was the 5th largest.

[BrushStart]

He should go buy a 4k sq ft mcmansion- the banks are practically giving those away...

The only silver lining to this whole housing collapse is that if you actually have money, you can now live like a king. Seriously.

[compn]

"According to the Federal Reserve, one in four American mortgage holders are ''under water'', owing more than their homes are worth".


theres no reason to blame pugh for getting stuck in the '2nd great depression' that we are in now. everyone has stories of what houses were selling for, what they are selling for now, people they know that are forclosed or unable to pay mortgages. people who have lost jobs and the idiot city tax assessors who assess houses way over their actual selling market price.

if you want to blame pugh for buying a high priced house in a not-so great area with poor city services. while taking pay cuts and not having the funds available to pay for that house, then thats a valid point. know your role, do the math, save your money, you'll need it for the bread lines.

[Detwa]

I don't blame him for the foreclosure, it just seems like in his case, this might have all been planned. It doesn't seem like it just "happened to him" as it did most others. With his history of not paying the mortgage even when he made over 300k, and then deliberately taking a job with a 75% pay cut, it smells suspiciously like he decided long ago to let the property go and use his lower salary as an excuse. Just my opinion though.

[Gistok]

Detroit is no longer considered one of America's biggest cities. It has been surpassed in population by Indianapolis and Columbus, and now is the 4th largest city in the Midwest, when it used to be the 2nd largest. Detroit is the 19th largest city in the US, just 30 years ago it was the 5th largest.

You're doing the apples and oranges comparison.... those cities have incorporated their suburbs... Detroit has not. Look at the metro areas... and not just city census figures. Detroit still has 4 major sports teams, a major symphony, opera, one of 1/2 dozen existing Encyclopedic art museums... a Roman Catholic Cardinal prelate [[not too many of them in the USA), and many other intangibles too numerous to mention.

Just comparing a number in a book and looking at the whole picture are 2 different animals...

[Novine]

"Who would benefit? -The millions of people who own Bank of America shares or are impacted by their profitability on a daily basis?

BOA may be a company, but its money belongs to and is relied on by real people."

If Pugh walks away, BOA still owns the property. If the property isn't worth what BOA thinks it should be, that's the bank's fault for making the loan in the first place.

[313WX]

Detroit is no longer considered one of America's biggest cities. It has been surpassed in population by Indianapolis and Columbus, and now is the 4th largest city in the Midwest, when it used to be the 2nd largest. Detroit is the 19th largest city in the US, just 30 years ago it was the 5th largest.

It depends on what measure.

Miami only has 400,000 people, but people still consider it one of America's biggest city [[ecause it's surrounded by a region with 5.5 Million People).

It's a similar situation with Atlanta.

In fact, if you were to ask an average joe what's the 2nd largest city in the midwest, they will probably still say Detroit.

That said, there's no denying that Detroit [[regionally) is shrinking rapidly relative to the rest of the country, which either way one spins it is not good. Even despite a stagnant metro area population, Detroit has fallen from a top 5 region to now a top 20 [[#11). Even Phoenix and San Francisco have surpassed Detroit shortly in terms of regional population.

[Hypestyles]

curious, these events.. we'll see what happens..

[Motor City Sam]

"According to the Federal Reserve, one in four American mortgage holders are ''under water'', owing more than their homes are worth".


theres no reason to blame pugh for getting stuck in the '2nd great depression' that we are in now. everyone has stories of what houses were selling for, what they are selling for now, people they know that are forclosed or unable to pay mortgages. people who have lost jobs and the idiot city tax assessors who assess houses way over their actual selling market price.

if you want to blame pugh for buying a high priced house in a not-so great area with poor city services. while taking pay cuts and not having the funds available to pay for that house, then thats a valid point. know your role, do the math, save your money, you'll need it for the bread lines.

Pugh's mismanagement of his money predates the "2nd great depression". He got 11 eviction notices while living in the Trolley Plaza apartments when he was employed by Fox 2 long before the housing crisis. He seems to have been outspending his income for awhile. He should not be lumped in with people who lost their jobs, took forced salary cuts, suffered medical emergencies, etc., and got into financial trouble through no fault of their own.

[Gannon]

To be fair, when Charles was first 'pitched' on the career-change by the Big Diamond [[somewhere on the DownLow), the secret side benefits for being on Council were both more lucrative and secure...so the pay cut wouldn't have been too severe.

Pugh's been getting squeezed by all of this oversight, keeps the alternative income streams dry. And makes one drive better, too.


Cheers!
John

[JenniferL]

IIRC, Pugh bought one of the restored/renovated townhouses on John R. These are some of the most unique, nicest [[IMO) townhouses in metro Detroit. And, when they came on the market, seemed to be worth the price.

I remember walking by that building one day while taking an unusual [[for me) detour from WSU to downtown. There were people fixing it up at the time and the whole neighborhood was starting to look really nice. It's so sad that it didn't last and now these condos are worth so much less than what people originally paid for them.

[DJ Tom T]

Pugh's competence [[or lack thereof) aside...

His situation illustrates the BIGGEST problem in America right now. Homeowners far and wide are taking a HUGE bath on their investments. Nothing is worth a dime until you sell it, and there is absolutely no market for home sales right now. We see it even worse in Detroit because of the crushed economy here, and the rampant mortgage fraud in this market. My condo that I paid a modest $75,000 for in 2000 would be lucky to fetch $30,000 today. That story is all over the place in America.

Until the housing market rights itself, don't believe any of the hype about "economic recovery" that the media is pushing. A house is the biggest investment for a vast majority of Americans. Until housing values come back [[if they ever do), no amount of stimulus or whatever else is going to help.

I've been advised time and time again by many people with greater financial expertise than mine to walk away from my place. At the end of the day, I need my credit so I choose to stay and pay. But if I didn't...I'd be gone from here in a second.

[Eric_c]

My two cents: the whole concept of a house as an 'investment' never made any sense to me. First and foremost, a house is a HOME! A place to hang your hat and sleep warmly. If anything, buying a house is an 'investment' in a community.

If the house value goes up or down, people should be choosing to buy based on the fact that they need a safe, comfortable place to live. The whole idea of 'staying' somewhere for a few years and then moving always seemed silly.

When I bought my house, I picked a place where I knew I'd feel comfortable for the rest of my life, not a place I felt was going to make me a ton of money!

[SteveJ]

I agree Eric. It used to be like that back in the old days but somewhere in the 70's and 80's, families seemed to be moving every 4-5 years. I still agree with the others in the fact if I bought my house for $300k and I owe 250k and the house next door sold for $120k, I would be better off bailing out because I would be paying on something thats not even worth it.

[Eric_c]

I agree Eric. It used to be like that back in the old days but somewhere in the 70's and 80's, families seemed to be moving every 4-5 years. I still agree with the others in the fact if I bought my house for $300k and I owe 250k and the house next door sold for $120k, I would be better off bailing out because I would be paying on something thats not even worth it.

Even if it's still a great home for you and your family in a great neighborhood?

[Cincinnati_Kid]

Even if it's still a great home for you and your family in a great neighborhood?

Great home, great neighborhood not withstanding, nobody wants to lose money.

[Vic_doucette]

http://www.mlive.com/news/detroit/in..._lead_det.html

Of note: "Pugh received 11 eviction notices for a Trolley Plaza apartment he rented between December 2001 and April 2005, and his condo association sued him in September over unpaid fees."

This isn't the first time, and I doubt it will be the last. Some people just can't handle money, whether they have only a little or they have a whole lot.

[Danny]

In the new millenium people are moving in and out of those homes in 3 years. There's no such thing as home ownership with a mortage, sub-prime mortages, CDOs or rent by co-optioin to buy. There is such thing as home ownership when you pay out of pocket. But in these days buying a home is a luxury that only the 1% can buy.


If you have seen NBC's 1987 sitcom "Our House" a story about a pre-senior male named Mr. Whitherspoon who lives in the 4 bedroom colonial in Los Angeles' far-northeast side [[the last middle class white community). Mr. Whitherspoon took in his relatives from Indiana. A mother-in-law with 3 children so they can get back on their feet after the man of the household had died.

I saw an episode when Mr. Whitherspoon's nephew David Whitherspoon wants to start a band with his friends. A cocky music promoter wants David and his friends to record a demo so he could introduce it the L.A.'s hot record companies. The cocky music promoter wants $10,000 dollars to cover the fees for show the demos of various record company producers. David's friends put in some money, but when David asks his uncle to chip in the money, He refused. Mr. Whitherspoon had a strange hunch that cocky music promoter could con the kids out of the chance for music stardom. One of David's friends wealthy father came to talk to Mr. Whitherspoon about investing his savings into to kids rock band. He even talked about how he invest in his house other capital for make more money in return. Mr. Whitherspoon replied that investing is ok when he did it in his retirement package long ago. However he would never give it up to no outsider, but only to his family for college and other emergencies. He aslo said that I bought this house and built it so that my family can live in. not to invest! later David left the band. After Mr. Whitherspoon sought what the cocky music promoter did to the kids rock band. He theathened to him that if your don't give their money back to their families, he make sure that the families will sue him for larceny! The cocky music promoter give the monies back their families and left.


The music controversy is not just the moral of the sitcom story, but the investing in capital from your home to any building is. It's a risk that many American families will take. People will have to invest in any home or building to do business and to live in. There's almost no way in the world with a starting middle income that you would buy a decent home in any land in America without putting a down payment or applying a mortage with a good credit record. American people are going to have to keep on borrowing money and most of them will pay them back less if they are in economic hardship. Therefore home ownership in United States is like you paying rent until you get cover the loans or be evicted.

WORD FROM THE STREET PROPHET


For the 99 Percent and the Spirit of Guy Fawkes.

I miss you so, Neda.

[Eric_c]

Great home, great neighborhood not withstanding, nobody wants to lose money.

Addressing the issue of a home that isn't worth what you owe, anymore...if one bails out on their commitment, won't they ultimately lose money anyway in the form of higher interest rates when and if they try to get a mortgage in the future?

I suppose in ridiculous exceptions, I could see it - paying $300k for a home that's now worth less than $100k or something, but even then...sometimes you just need to ride out the storm.

[antongast]

Addressing the issue of a home that isn't worth what you owe, anymore...if one bails out on their commitment, won't they ultimately lose money anyway in the form of higher interest rates when and if they try to get a mortgage in the future?

I suppose in ridiculous exceptions, I could see it - paying $300k for a home that's now worth less than $100k or something, but even then...sometimes you just need to ride out the storm.

Fair enough, but if this is your argument, it follows that it's up to each individual homeowner to decide which course of action makes the most sense in their particular situation. If this is the case [[and I would agree that it is), then all the judgmental hand-wringing in this thread about Pugh's decision to walk away from his condo strikes me as rather inappropriate. He's doing what he thinks makes the most sense for him, either he's right about that or he's wrong, and either way it doesn't affect his ability to represent us in city government.

[SteveJ]

Addressing the issue of a home that isn't worth what you owe, anymore...if one bails out on their commitment, won't they ultimately lose money anyway in the form of higher interest rates when and if they try to get a mortgage in the future?

I suppose in ridiculous exceptions, I could see it - paying $300k for a home that's now worth less than $100k or something, but even then...sometimes you just need to ride out the storm.

Not really. I know someone that foreclosed on his home and bought a new one within 4 years and had a competitive mortgage.

[stasu1213]

I didn't voted for him for this reason. Now he is telling the policemen and firemen to take a pay cut or he and his collegues will layoff some of public safety personel. I can't feel sorry for him for he had made over $100,000 dollars a year being a news anchorman.

[313WX]

I didn't voted for him for this reason. Now he is telling the policemen and firemen to take a pay cut or he and his collegues will layoff some of public safety personel. I can't feel sorry for him for he had made over $100,000 dollars a year being a news anchorman.

Exactly, I completely agree.

[kraig]

Decent, honorable people who borrow money pay it back. Even if they lost money on the investment thay made with it.

Buying a house is an investment. In most cases, it's the biggest investment that a person will make. At the point were that person knows that the investment will only amount to a purchase, it's time to walk. Granted, that's not the case with Pugh, he's never kept up with his bills, even when he was renting. But, even honorable people have to walk away from deals that turn horrible.