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Rita Gillam, 85, will likely lose control of the Orange home she has owned for more than 50 years.

Gillam, a widow, said she has owned hair salons and baby supply stores for decades. When her baby store hit a rough patch, she borrowed $412,500 in 2005 and then refinanced with Fremont Investment & Loan for $556,000 in 2006. Before those two loans, her home had been paid for, she said.

The $556,000 is gone and so is her business, Gillam said.

http://mortgage.freedomblogging.com/200 ... ure/11511/

Thoughts?

Too bad.

If you remortgage an already payed of house (which is not part of the business-inventory) to finance a business in trouble you're on a certain path to personal financial meltdown.
A mistake often made by business owners because they get too attached, on a personal level, to their business and stop seeing it for what it really is, a means to make a living.
If a business starts hemmoraging money than it's time to close shop or declare bankruptcy, there is no shame in that , sometimes an old established business that did well for year after year just sees its business model become too antiquated to follow new trends or adapt to a changing market, that's a clear sign to call it a day and start up something else or quit while you're ahead.

So long as it wasn't done under duress, she has no leg to stand on. She borrowed against her residence, to prop a troubled business; not a smart idea.

Hopefully she has a good social network to support her.

The heartless bastard in me says "Self-Inflicted Wound".

While I do feel for her solely because of her advanced age, that's the one and only thing that gives me pause.

Otherwise, well . . . .if this were a 35 year old? 50 year old?

No ones fault but hers.

She made a bet with her house as collateral and lost. What should I do about it. I and millions others did the responsible thing and didn't use our houses as a cash cow. What do we get for being responsible? Higher taxes.

AndesSMF wrote:

Rita Gillam, 85, will likely lose control of the Orange home she has owned for more than 50 years.

Gillam, a widow, said she has owned hair salons and baby supply stores for decades. When her baby store hit a rough patch, she borrowed $412,500 in 2005 and then refinanced with Fremont Investment & Loan for $556,000 in 2006. Before those two loans, her home had been paid for, she said.

The $556,000 is gone and so is her business, Gillam said.

http://mortgage.freedomblogging.com/200 ... ure/11511/

Thoughts?

While I would normally feel bad for her, she's going to lose her home because she gambled and lost. You have a home that is paid off and you mortgage it to support a small business? Can we say how stupid could you be?

I can't think of any valid reason to keep the business afloat - especially not when the price is using the equity of one's home.

Like said above, I hope she has a good social network to support her.

At that age she should have known better.

Too bad, so sad. She should have let the dying shop die.