I bought it in 2005 for $503,000, most of it borrowed [...] The sellers had trashed the house before leaving for Colorado [...] To help pay for the work, I refinanced in 2007 at $511,000 with a five-year fixed-interest first lien and a variable-rate equity loan. [...] In February, Zillow.com said the house on which I owed $511,000 was worth $381,500. A comparable house a block away sold for $260,000. [...] The bank set a date for a foreclosure sale, then postponed it. Finally, in April, it agreed to an offer of $325,000 for the house. The sale closed less than 48 hours before the bank's scheduled foreclosure sale. [...] My credit, once exemplary, is shot. My lack of financial security is disconcerting, and I expect it will dog me for years.
The house appears to be 520 Meridian Terrace, for which she paid more than double what it sold for less than two and a half years earlier.
Most people would learn quite a lot from that: don't buy a house in a bubble, don't buy a house at a ridiculous multiple of its rental value, don't do cash-out refis, don't take out an adjustable-rate mortgage, don't borrow money you can't afford to pay back, etc. But not an LA Times staffer!
I can't find a life's lesson here; no insight into why this has happened to so many people. The banks could help us, but they don't.