Last month several people came to a City Council meeting voicing concerns about Steve Dicterow’s financial difficulties. The response from the public was compassion, “everyone has tough times.” Laguna has a history of caring for one another. That’s who we are. But it can’t be left at that. How did Mayor Dicterow get there?
Mayor Dicterow bought his home in 1988 for $340,000. Since that time he refinanced his mortgage seven times: $368,000 in 1995, $440,000 in 1999, $547,000 in 2003 with an additional $50,000 second, $500,000 additional borrowed in late 2003, $1 million in 2006, and $271,000 in 2007 as a second.
Granted, many people refinanced to reduce their mortgage rate during the roaring housing bubble of pre-2008. It was tempting to pull out ready money as the value of a home increased during this period.
However, it was always a gamble to risk the family home particularly as Mayor Dicterow did to finance new business ventures, such as a motorcycle circuit venture and a mold and water restoration venture, both of which unfortunately failed. Since he had accumulated another $281,000 in unsecured debts by 2014, he used the bankruptcy option to protect his home. The bankruptcy option seems reasonable in this set of circumstances, but the multiple refinancings of the family home at such a level seems unwise.
We can (and should) feel compassion for anyone in danger of losing their home. It is a tough and sad situation for anyone to experience, and thank the government that there is a bankruptcy option for protection of the home.
The real question is the soundness of Mayor Dicterow’s decision to refinance at increasingly larger amounts. It makes one wonder about his abilities to make sound decisions over Laguna’s $70 million budget.
When Mayor Dicterow supported building a four-story garage at the village entrance, which was eventually blocked by a residents’ revolt, he stated at the City Council that a $65 million dollar bond is like a mortgage, “you never expect to pay off your mortgage”. For him that’s unfortunately true.
George Weiss, Laguna Beach