Foreclosure guilt haunts home buyers

LAS VEGAS -- Right about now, Anya Sanko should be enjoying the thrill of being a first-time home buyer. She bided her time, saved her money and jumped into the market in time to snap up a 1,785-square-foot home with a pool for $143,000.

Yet Sanko, 37, is having a hard time celebrating. Her parents lost their house in Michigan to foreclosure after her father lost his job, her sister's home equity has evaporated and friends struggling with mortgages don't want to hear it.

And then there's that slab in the backyard of the foreclosed house she bought. The previous owners and their children had scrawled their names in it when the concrete was poured, back in 2005 when they bought it for $287,500 amid the Vegas housing boom.

"I think about them all the time," says Sanko, who works for the city of Las Vegas. "I see the names in that concrete slab, sometimes I get their mail, I see all the work they put into this house.

"It's sad that they never got the reward from all of that work."

Living with the past

This sentiment — call it economic survivor guilt — is a little-noticed emotional byproduct of the financial devastation wrought by the housing and banking meltdowns of the past year. Sanko was always frugal, has a stable job and bought within her means, and yet there's a lingering sense, as she puts it, that "you're capitalizing off of somebody else's misfortune."

It's an especially prevalent feeling here in Las Vegas and surrounding Clark County, which RealtyTrac found in mid-July had the nation's highest foreclosure rate. One in 13 homes was owned by banks, the research firm found, a startling statistic that reflects both the extent of the region's economic turmoil and the abundance of houses for sale at bargain-basement prices.

"I do hear this from people who are looking, that it feels strange to be getting a great deal because someone else couldn't afford their home," says Jack LeVine, a local real estate agent. "I just remind them that it's not their fault and that they need to take advantage of the market for the good of their families."

Monique McCoy, 44, knows this logically, but it doesn't keep her from reacting emotionally as she visits one foreclosed property after another with her real estate agent. Sometimes, she says, she can sense the drama that must have occurred within the walls, especially the angst that drives some evicted residents to trash the place on the way out.

"Some of the foreclosures are in such bad shape that the people obviously felt so bad losing their home," says McCoy, who has a $113,000 bid in on a short sale for a home that last sold for $244,500 in 2004. "You sense the feeling that something went very wrong. I just don't want that kind of vibe."

To be sure, not everyone feels bad. Some compare it to buying stock when someone else is taking a loss. The difference, says psychologist Sylvia Lafair, is that you never meet or come in any form of close contact with the people who sell you discounted stock. Sanko is actually living in the same space as the people who suffered financial misfortune.

'A human face' on the issue

"I think there is a guilt of survivorship that is real," says Lafair, who is based in Santa Fe and has provided counseling for real estate agents who say clients express this concern.

"I don't think it debilitates very many people, but the people who are able to buy houses now can feel sympathy for the other people. My recommendation is that when you're moving, take (your) old stuff and say, 'Do I really need this?' and give it to a shelter or the Salvation Army. One way to balance the guilt is to do something to be gracious."

Mixed into the guilt, however, is some anger. Sanko notes that she was left out of the conversation earlier this decade when all her friends were bragging about the home they bought and the equity they had accrued. Being house-proud, once trendy, is now socially awkward.

"It's personally to a point where I kind of don't talk about it with certain people," Sanko says. "I say 'Here's my house, isn't it lovely?' and I don't go into a lot of detail."

In most cases, folks who buy foreclosed properties never deal with the previous residents, but Jesse Chase, 30, of Las Vegas came home one day to find his life partner sitting with the woman who owned the house before her. The two were weeping.

"This lady came by just to look around," says Chase, who bought the 1,800-square-foot ranch home for $130,000 in April. "Her husband had lost his job because he got cancer and couldn't work, and they couldn't afford it anymore. My partner invited her in and it totally put a human face on what's happening.

"I really wish she hadn't done that to us. We cried about it for days."