The Las Vegas Dreamer
Debbie Doussault came to Las Vegas from Rhode Island in 1990. She was 30 years old, just passing through, visiting a friend. But within a couple of days, she had a job as a waitress, making better money than she ever had. "The economy was so bad back home, and the money was so good out here," she says. "I couldn't leave."
Eventually she got a job at the MGM Grand, a big glass casino with a statue of a giant golden lion roaring by the door. She was a banquet server. Like most casino jobs in Las Vegas, it was a union job with good benefits. As she gained more seniority, and more shifts, her income grew, nearly $10,000 each year. By 2005, Doussault was making almost $80,000. She was renting a house, but her landlord decided to sell it, and one day she thought to herself, maybe I can buy it. The house cost $320,000, more than she could really afford, but the way prices kept rising, she was afraid if she didn't buy soon, she'd miss her chance.
She took a shot, and approached a mortgage broker. "I put everything out there: this is what I have, this is what I make, I don't owe any bills. Let the chips fall where they may, we'll see if I get a loan." And she did, with a catch. The only way she could afford such a big mortgage was if she put no money down, and paid just interest, no principle. So she got an "interest-only" loan; these were common back then. The small print said her interest rate would go up after two years, and she'd have to start paying the principle. But she didn't spend too much time worrying about the small print. And the way property values were going up - and her income too - she figured she could always refinance her mortgage.
There was a phrase you heard a lot in Las Vegas back when Doussault was buying her house: the "Las Vegas Dream." It was actually a union slogan. The union that represents many workers like Doussault was pressuring the casinos to take some of the enormous wealth they were making as tourists poured into Las Vegas, and funnel it back to the workers, in the form of better wages and benefits. Thanks to those efforts, hotel maids, cocktail waitresses, and other service workers in Las Vegas made several times what workers in the same jobs were making in other parts of the country. People without college degrees, doing things that in Rhode Island or Michigan would land them in the category of "working poor," had a chance, in Las Vegas, to make it into the middle class. They were living the dream, doing better than their parents, buying their own homes.
This new shot at upward mobility happened when housing in Las Vegas was still relatively cheap, loans were easy to come by, and property values were going up and up. It created the perfect conditions for people like Doussault to think, not unreasonably, that buying a house, even one that was a little more than she could afford, was a smart gamble. The Las Vegas Dream was like the American dream, except that while the latter implies a slow and steady march toward progress, generation by generation, the Las Vegas version promised a bigger and faster payoff for those willing to take some risks. If the Las Vegas Dream had a poster child, it could have been Doussault.
From the outside, her house looks like all the others on her street: two-stories, white stucco, desert landscaping. But inside, her imprint is on every room. Pictures of Elvis line the staircase. The bathroom has a zebra theme. There's a dog motif in the guest bedroom. Her bedroom is royal purple, in alternating stripes of high-gloss and satin, framed by white columns. She says home improvement shows on cable TV inspire her. The only room she didn't decorate is her roommate's. Since she bought the house, she has shared it with an older guy she works with, to help make her mortgage payments.
But that help is no longer enough. In 2007, she had to start paying down the principle on her loan, and at the same time her interest rate reset, and it goes up every six months. Now it's up to 10 percent. She's paying $2133 a month, 60 percent more than she did when she first bought the house. Meanwhile her annual income is down by $20,000. Fewer conventions come through town now, and she has fewer shifts serving banquets. And because so many homes around her are in foreclosure, her property value has plummeted. Her house is worth less than she owes on it now, which means she can't refinance.
Doussault's friends tell her she should just walk away. But she desperately wants to keep her house. She sees it as her greatest accomplishment. "Being single, being on my own, and I turned around and bought my own house. I mean that's a big deal. It's a really big deal. The thought of losing it is kind of like a slap in the face," she says. "My heart is here. This is home. It's where I'm supposed to be." Now Doussault is taking more financial risks, to try to save her house from foreclosure. When the bank denied Doussault's request to modify her loan and lower the payments, she paid a company $2500 to negotiate with the bank for her. She got a few follow up calls from an employee, and then never heard from him again. Scams like this are common in places like Nevada where so many people have mortgage trouble now, but Doussault is determined to find help. She saw an ad on TV for a lawyer who looks for technical loopholes in home loans, and sues banks to stop foreclosures. He charges $2800. Doussault borrowed the money from her mother, and was about to hand it over to the lawyer, when the attorney general indicted him for practicing law without a license.
"That's the frustrating part," Doussault says. "Not really knowing who to trust." Doussault has now put her trust, and a few thousand dollars more, in another company that says it can get better terms for her loan. While she waits to see if the company is successful, she has stopped making her monthly mortgage payments. It's a risky move that could ruin her credit and lead to foreclosure, but at this point, she feels like she's got nothing left to lose.
Back to Foreclosure City.