‘Sitting on time bombs’: Cal. investor defaults on nine homes

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Here’s a glimpse into the real estate mania of a couple of years ago, and the fallout: ‘A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.’

A mistake? Really, you think so?

More, from Reuters: ‘Shawn Forgaard, a 37-year-old software company project manager (pictured), bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.’

Reuters reports Forgaard, of Santa Cruz, used $800,000 in stock options to build his small real estate empire. Beginning in 2004, he bought houses in North Las Vegas, Phoenix and Palm Springs. He kept overhead low by using negative amortization loans.

‘I knew I was sitting on time bombs,’ Forgaard said. ‘I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.’

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: Shawn Forgaard with his wife and child, via Reuters.