Okay, here's what is important.
Yes, I"m sure that Carol could have had a little better money management. What I will tell you is that Carol, in my experience, has never lived outside her means, and has been pretty prudent with the money she's made. That, however, can mean that with the collapse of the financial system and the hits some pension and investment funds took the money you had aint the money you wish you had. Since most musicians, with the notable exception of Duff McGagan, aren't financial planners, you trust others to help you put money in the right things to make it grow.
My personal example are two different accounts I have. One is in a bank savings, the other was an investment account that was heavily in mortgages. Back in the day, mortgage backed accounts were the best, safest investment. They didn't grow like regular stock funds, but had a pretty decent return and they were known as very secure. Flash forward to 2008.
When it was revealed that many of the bulk, bundled mortgage notes were rated and sold as AAA to the investment fund managers but were actually near junk status, it was a whack. My personal stake had the account not only nearly collapse, but the account which I had been building for nearly 20 years went from having a very modest 5% return to me actually losing initial principle! Yes, all the earnings over the years, and some of my original principle were gone. So, as I was planning on a nice account to suck off of as I got older, now its a piece of crap.
My savings account, on the other hand, has gained about 3% over the same time, and even today I'm getting a lousy .5%, but i'm still getting interest. Based on that I should have just put all my money in a savings account 20 years ago. I trusted the fund manager, and for many years he was great. He had little idea of what the fund was buying was really junk, and as most of us who follow this topic know that is one of the really evil things that mortgage brokers were doing over the past 10 years.
So, Carol, who is not a whiner, found that her original financial planning was suddenly thrown into a loop. And at her age (we're talking 70's, she ain't 20 anymore) where your ability to adjust to sudden, more extreme downturns is much harder, well, she got behind in her mortgage. Its not like she sat on her butt, but she couldn't make the gap up quickly enough. And owning a home in California is way more expensive then most parts of the country.
Think about it. Put yourself in her shoes. You are in your 70's. The nest egg you were planning for is effected by the evil financial dudes, so your safety net is much smaller. Then, your income from protected intellectual property drops substantially and quickly because of this thing called the internet and P2P and bit torrent, and also you have artists who blatantly turn their noses at the law and the industry, reducing what you planned reasonably to be an income. Oh, and you have a mortgage, taxes, medical insurance, car insurance, food, clothing all to pay.
So, you then ask the bank to refi, telling them you want to pay your mortgage, but you have had a real sudden income problem. Not no income, just a reduction. You ask them to redo the terms of your loan so you can have a house AND pay your bills like a good citizen. Then, the mortgage company, being incredibly stingy because of all the ills they themselves perpetrated, decide that they will now follow every single letter of the law, and since your property value has dumped (parts of CA saw a 30% drop) its at or near underwater and you have no equity. So no, they will not give you a redo or refi. So, you keep trying and at some point you have to decide if its better to eat and have medicine or a house that is killing you. And the bank doesn't care, they just foreclose, because in their minds they have to do that on everyone immediately and get rid of all the "bad debt", which, by the way, the government is helping them write off and pay for. Do it now, while the government is padding your losses. Wait or refi and if there is a default later you might get stuck with the whole thing.
So there you have it. Responsible citizens ask to have a redo or refi. They want to pay the mortgage. Carol did not just walk away from it, like soooo many other sleazebags I know did. And that includes people who could afford to pay the mortgage and bills but believed that owning the roof over their heads wasn't worth it since it wasn't gaining value.
