- Real Estate
A Foreclosure Story - Mine
I had been pondering over topics for a new hub for months and uncertain as to why I couldn't come up with something viable to write about, and just felt unmotivated to do much of anything. Well, I figured out what it was. I have been depressed over the foreclosure of my home and found myself in the fourth stage of 's stages of grief, depression. Her theory was initially intended to address death and dying, however the same principles can be applied to any significant loss. For me it is my home, a dwelling that was set up perfect for myself and my daughter's growing family. Kubler-Ross
It was an older large four bedroom home with newer additions and included an attached two bedroom apartment (for me!), yard for the kids, and the desired school district (my alma mater!). We had already fell in love with the online description, but when we took the tour it was over! We had found our home! Preliminary papers were signed and the process was underway. Naturally there were glitches along the way such as: the size of the mortgage (due to minimal down payment and mediocre credit) needed to be done in two loans, discovery of mold needed to be addressed, more money for the inspections, and closing costs. All of which we managed to accomplish. OK, so then the real estate agent gave us the monthly mortgage payment estimate, which was manageable for us around $1900. We were very excited as this was the same as the rents we were paying.
In December 2006 we were at closing. Everything was reportedly in place. But then we were hit with two unexpected, unrevealed issues – 1) need for more flood insurance. We knew the area had issues in the past regarding flooding and had acquired a policy, however we weren't told that it was a FEMA flood zone which requires a higher premium of insurance. 2) – the total mortgage payment jumped to nearly $2400 after adding in the insurances and taxes! We were momentarily numbed when told we needed another $1,000 for closing. We were spent! Were we getting in over heads? - the practical side of me pondered. Well at that point, moreso I am guessing, to save his commission rather than an act of charity, our real estate agent coached us on ways to afford the payment and also proposed to lend us the money for the insurance. We wanted that house so badly we took him up on his offer. We moved in just days before Christmas.
Denial - This can't be happening
Fast forward to 2009, aside from a few minor set backs due to unforeseen expenses, we were making payments and enjoying our home. Then we were hit with bad news. The company we both worked for more than 10 years was failing, and eventually sold. The new owners had to make some tough decisions to save the business which involved many dependent lives. Many employees suffered a cut in pay and for my daughter and myself that meant a decrease of about $1500 a month in our income. We scrambled to try to keep up the payments - sold a car, had yard sales, picked up side work, whatever we could. But to no avail. We couldn't do it and pay the utilities and food for the kids, etc.
Anger and Bargaining and more Anger
We were in contact with the mortgage company and provided proof of our financial changes. We were sent to a HUD counselor who assured us we could get help...wrong...we were denied a modification by the mortgage company because our current income was not enough to afford the house. Really? And that HUD counselor had told us to stop trying to pay the mortgage during the modification process and use the money to catch up on other bills, so we did. We appealed to the mortgage company again. They sent out another modification packet, went to another HUD counselor and this time we were actually approved for a modification! We then needed to make three trial payments of $1500. Great! We could afford that and made those payments. But! When we received the final agreement the new payment was more than the original amount! That made no good sense and couldn't be fair. What the hell were we going to do? By then we were several months behind and the mortgage company wasn't budging and would not accept any partial payments. (Note: these modifications and communications with the mortgage company are long and drawn out!) Another call to them the summer of 2010 left us with the impression they were going to try to work something else out. OK, it's all we could hope for. Then about a month later we called them again and were told they no longer held our mortgage! WTF? (Sorry, you, the reader, can imagine my frustration by then and the emotion it continues to produce). They didn't notify us of this and we unknowingly had been throwing away correspondence from the new companies thinking it was those mortgage assistance solicitations! We were then contacted by the two other mortgage companies. The first one held the smaller mortgage and gave no problems working out an affordable agreement for payments. That enabled me to exhale and feel hopeful that things would actually work out. But then the second company with the larger mortgage wanted something like $30,000 to bring the account current or face foreclosure. Are you joking? We had been able to save some money over the months, but not even close to that. We pleaded to the new company for understanding of our situation, and were able to generate an application for modification, which only resulted in a payment amount comparable to the initial mortgage. I asked them how is that helping when we couldn't afford the original amount? We were told these decisions were made by the private investors who actually finance the mortgages. I thought the bank lent the money? How would I know? We really needed a miracle.
We had been getting many calls and mail from companies claiming to be able to help us save our home. One of them turned out to be a legal firm that offered assistance for homeowners in trouble. This firm's representative said all the right things in such a 'legalcentric' manner we went for it as we were desperate. Sent in all the requested info, sent two of the payments for the service, and waited. Then this lawyer informed us that he could not get the mortgage company to reconsider the modification ...modification? That is not what he said he was doing, he was supposed to be using the law to help us. Oh did we feel stupid, taken advantage of, and angry. He did nothing different than what we had done ourselves. What a crock.
Acceptance - Oh Well
So, needless to say, the foreclosure notice came and we sulked. By that time with improved performance of our company, my side work, and my daughter's two jobs we had rebounded our income close to what it was. But it was all too late. We thought we tried everything we could to save our home short of breaking the law. We accepted the buyer's cash for keys offer and we had to move.
We were unable to find a place that enabled us to stay together. Nice places in nice neighborhoods won't rent to someone with bad credit, especially caused by a foreclosure. Life for us now is more expensive than our mortgage, as we both have separate rents and utilities. We remain unhappy and struggling, but we manage. I guess my grieving over my home is transitioning towards the final stage of acceptance per Kubler-Ross. I have read many similar foreclosure stories over the past several months and I've read terrible comments made by people bashing the homeowners for not keeping up their payments, “allowing” their homes to be foreclosed, that they didn't try hard enough, should have saved more money, can't live for free, etc, etc. I just hope these insensitive, judgmental people never have something happen that will cause them to endure the heartache, humiliation, and depressing sense of loss associated with losing a home this way.
Oh and the final kicker to my story? I have recently learned that our house is for sale for nearly $100,000 less than our defaulted price! Really? I just don't get it.