Boom, Bust in Area Beset by Foreclosures

Greg Giniel sits out in front of his home which is in foreclosure in the Villages of Queen Creek housing development Thursday, Sept. 27, 2007 in Queen Creek, Ariz. Giniel says he will try to buy his home back at the foreclosure auction in November. (AP Photo/Ross D. Franklin) (Ross D. Franklin - AP)

"I was thinking, man, if I could have 10 properties, I could just kind of retire ... and kick back and live off the income," says Rowberry, a nuclear safety inspector.

But the speculative mind-set confounded buyers like retiree David Pickering. When Pickering and his wife left Pennsylvania in August of 2004 for a new home in the Villages, they'd never heard of interest-only loans and the idea of buying a home as an investment hadn't occurred to them.

They were simply buying a place to live, hopefully for a good, long time.

Around them, though, such notions began to look very old-fashioned.

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The American Dream is a myth overdue for revision.

"There's been a huge shift in the way people view their houses," says John Karevoll, who tracks real estate for DataQuick Information Systems. "Your house now can basically be used as an ATM."

Twenty years ago, families celebrated when they got a mortgage and again when they retired the loan. A home meant security. The financial commitment promoted both pride and neighborhood roots.

But Americans have become much more mobile, and looser lending has made it easier to buy a home and to borrow against its value.

Now a home is more _ or less _ than a place to live. It is an investment _ a way to make money and finance a lifestyle, says Robert Manning, an expert in consumer credit and debt at the Rochester Institute of Technology.

The housing and lending industries encouraged that transformation, promoting not just subprime loans but mortgages requiring little or no documentation of income, no money down, and interest-only payments.

When easy borrowing combined with a run-up in prices, speculators joined the fray. In Arizona and other Sun Belt states where foreclosures are rising fast, homes not occupied by their owners account for an outsized portion of foreclosures, according to the Mortgage Bankers Association.