Moreno Valley story: One buyer, two cycles, three foreclosures

Interesting portrait of the economic cycle of boom and bust in Moreno Valley in today's L.A. Times. It goes kind of like this: Buy a house in the '80s boom, lose it to foreclosure; buy another house in the post-2000 boom, refinance it twice, lose it to foreclosure. Then buy a third house -- a foreclosed house -- in 2008.

That's the story in three acts (three houses) of Bob Chiordi, as told in today's paper by Peter King.

Act 1, the first house:

Chiordi first heard about Moreno Valley from a friend in the mid-'80s. Priced out of the red-hot Los Angeles and Orange County housing markets, he joined the caravans of first-time home buyers rushing east into the so-called Inland Empire.

... And then, with recession and base closures, California fell into hard times. Moreno Valley, and Bob Chiordi, fell harder. ... Chiordi soon discovered he owed far more on his house than what it was worth, and so, he said, "I just walked away."

Act 2, the second house:

By 2002 the Riverside Press-Enterprise was editorializing about the "Moreno Valley Comeback."

Chiordi rode this tide up. He sold his business, went to work as a branch manager at an auto dealership, bought a new house and, as real estate values soared, refinanced it twice, taking out money to pay down old debts and for a family vacation. He had purchased the house for $160,000. It was now worth $420,000, at least on paper.

... In June (2008), with the bank moving to seize his home, Chiordi filed for bankruptcy.

Act 3, the third house:

With financial help from his extended family, Chiordi will be moving this month with his wife, two grown children and two grandchildren into a house they've bought on a hill in the eastern corner of town. It's a tidy beige structure, built only four years ago, with a terra cotta roof and a backyard view of Moreno Valley spread out below. It had fallen into foreclosure last April, and the price was right

Analysis/bloviation: This is the third or fourth anecdote I've heard from the Inland Empire about a person who was losing a house to foreclosure, and then turned around and bought a less expensive foreclosed house. As a personal economic strategy, it has a certain logic: why struggle to keep paying an inflated 2005 price for a house when you can give it back to the bank and get something similar at a discount? As a broader trend -- if in fact it is a trend -- it could encourage "voluntary" foreclosures, because it sends a message to the 2005 buyers that they are throwing their money away.

--Peter Viles

Your thoughts? Comments? E-mail story tips to Peter Viles

Photo Credit: L.A. Times

Comments

[syscom3]

Before I will criticize this man, I will wait for the executives and managers of the big wall street brokergaes and banks who collected 10's of millions in bonus's to pay it back.

This guy is a just a tertiary symptom of the rot that infects wall street.

[Joel]

So, I'm confused here. Am I supposed to feel bad for this man who lost not one but two houses to foreclosure? I can certainly understand, and sympathise, with those who face hard financial times because of economic changes...but I have little regard for those who foolishly set themselves up to fail time and time again and expect to be looked upon as victim.

Sir, you are not a victim. What has happened to you...you have done to yourself. And, believe me, I have walked a mile in your shoes. But I learned my lesson and began applying the knowledge in my life to build a better life. You can't spend more than you earn. You can't buy something you truly can't afford just because you want it. Well, truth be told, you can do all those things...but your life will be a miserable wreck after the house of cards falls in. Here's to hoping you learn the lesson this time as it it's never too late to begin anew.

Peace

[The original RZ]

Mike, Mucker, et al...
I think one of the symptoms of reading and posting on blogs is that in general it is very easy to skip something in reading, and then post something hasty in response. I guess posters should approach comments like angry emails - write it but wait a minute before posting to think about whether you are saying what you really want to convey.

I'll admit that had I read the article about Bob Chiordi a litte more carefully, I wouldn't have added my last part about whether he has no shame. From the article it seems like he has some. I still question how he got financed for his last home, though.

[Inland Empire]

People like this do not deserve to own homes. He will some how manage to lose this one too.
As for people walking off in the Inland Empire. I think it happens everywhere now but I do know of one. Some folks we know bought at the top of the market. They bought an great house with lots of charm and a great view in a great neighborhood.
They sucked all the equity out of it, bough a cheap repo down the street (no view and bad floorplan) and a huge gas sucking vehicle. They walked on the first house. The claimed that they tried to sell the first house but no for sale sign was ever seen and it was not listed on any of the usual sites (realtor.com, trulia,com, redfin.com, zillow.com, yahoo real estate etc).
I believe in the law of karma and what comes around, goes around. I do not think these type of people escape without a scar.

[TrojanDLA]

Why are people so mad at Mr. Chiordi when it was the bank that offered him the loan?

If a beggar comes up to me and asks for $20, and I give it to him and he goes and buys drugs, he can be blamed for the drug use, but who gave him the money?

Mr. Chiordi didn't rob the bank, he simply applied for the loan advertised on the radio/internet/billboards and the bank obliged. And if he walks away from this loan, AGAIN, who's the fool?

[patty]

You guys that want to blame and crucify this man, who is my brother, are idiots. Does a reporter ever accurately report. NO. This man has always had one if not two jobs. This man has taken care of my sister who had breast cancer and and sent my niece to private school he has dedicated his life to God and youth ministry as well as worked hard all his life.He has always taken in homeless kids and tried to help his community.He is not buying a third home. Nor has he" Walked Away" from any home. Their family vacation was to come say good bye to my mother who died and had to travel to Texas for a funeral. So for all of you perfect people out there please understand this man and my sister have worked their entire lives and never lived out of their means. They had real life situations that came up they did not expect. my mother died an early death and my sister got cancer and bills mounted that they could not afford. And it was due to theses two situations that caused them to lose their homes.