Yaletown Penthouse Foreclosure - "How is it possible for this guy to be in foreclosure if the price has tripled since he bought? Couldn’t he just sell the place, pay off his mortgage, and still have a few million left over? The answer: HELOC."

This from Anonymous at robchipman.net 25 Mar 2010 11:56 am -

“I have a friend who rents a Yaletown condo. He told me that the guy who owns of one of the penthouse suites is being foreclosed on. Now, this is no ordinary penthouse: 3 levels, multiple rooms, 360 views, spectacular. Bought in 2002, it has since tripled in price. Don’t know exactly how much it’s worth, but it’s in the multiple-millions. So, how is it possible, I asked, for this guy to be in foreclosure if the price has tripled since he bought? Couldn’t he just sell the place, pay off his mortgage, and still have a few million left over? The answer: HELOC. This guy managed to squander several million dollars of a home equity loan in a few short years, and now has nothing to show for it (all of it, incidentally, likely insured by CMHC).
This kind of story goes a long way to explaining the faux wealth in this city – no industry, low wages, yet everyone has the appearance of wealth. And although this is just one anecdote, that stats show that BCers are more heavily in debt than any other time in history, i.e. this is not an isolated or rare occurrence. We will be hearing many more of these stories in the coming months; it’s going to be ugly.”