Can I Prevent Foreclosure On My Home?

Now, before you start feeling sorry for an old lady in the autumn of her life who is about to lose her house: STOP! I am actually relieved about this life altering event. I have enjoyed every minute of being in this house since 1984. It has served me well. It has brought me years of contentent and fulfillment. Now, it's time to let it go.

It was love at first sight when I first saw the old house that was to be sold at public auction. It looked so similar to the house I grew up in. It had so much character! The house is an old Florida Cracker house that had been built in 1900 and served as a Guest House. That was before many motels were built. Families with children would come and stay in the house. So, each bedroom has its own entrance and private full bath. Oh, how I wish these walls could talk and let me hear the conversations that must have gone on, and especially hearing the children laugh that stayed here with their parents! When the day of the auction came, my bid of $3,000.00 was accepted and I got the house. I paid a house mover another $3,000 to relocate it onto a lot I had previously purchased. The house had to be brought up to present building code, so I spent another $65,000 to get that done.

I knew the house needed a lot of work, and I was so excited about getting all that done. I’m a big “do-it-yourself” person and I looked forward to painting, wall papering, sanding the hardwood floors, and varnishing them. There was an unfinished attic. I could just visualize turning that space into large room that would be all mine. It would have room for my antique bedroom set, a living area, another area for my sewing, my office and a bathroom. I took a legal sized pad up to the attic and drew my plans to scale. I just couldn’t wait to begin that task! I had pine paneling installed for the walls and ceiling. I wore out two belt sanders before I varnished all the sanded wood.

In prepping the site to receive the house, 15 pine trees had to be removed. I then brought in fill and shoveled it smooth.

My flower gardens are the envy of my friends. Roses grow very well in the yard, although most of my plants are grown in containers. I like that because I can move them around to different parts of the yard.

I am a very “crafty” person. I enjoy woodworking. I have power tools that most women would not know how to operate. The house has given me a perfect place to practice my creative handiwork. I always look forward to each day with a great attitude of “what will I do today”. I really think the house has been healthy for me. It has caused me to exercise much more than if I didn’t have it. Because my bedroom is upstairs and I am up and down many times a day, I’m sure that is why I have good calf muscles in my legs. I think going up and down ladders to do all my projects has help to keep me limber and fit. I have never spent a bored day in this old house. My children love to bring their friends over to “show off” my house and all I have done to it. They refer to my old house as “Mom’s Museum”.

To better understand the reason I’m going into foreclosure, and how I managed to get myself in this situation, I’ll have to go back in time, where it all began.

After the unexpected death of my husband, I sold our house. I couldn’t bear to live in it. There were too many memories…I would see him just as though he were still alive. The house sold quickly, and with the proceeds I purchased a nice three bedroom house in the country. My four daughters had horses and the new house was ideal for us. After three of the daughters left home, I decided it was just too big and expensive for just the one remaining daughter and me. I sold that house and used the proceeds to buy a lot with plans to build a small house. I could have had a debt free home. If I had been smarter, that is exactly what I should have done. Real Estate in my area was booming. Banks had plenty of money to lend even though the interest rate was high at that time. I recall rates being around 14%.

I have always been interested in real estate. I took a Real Estate class and got my license to sell. I began going to seminars on how to build wealth through real estate. After a couple of years, I pulled out the equity in my house and became a landlord. The bank was only too happy to give me a mortgage. I then purchased a duplex with the proceeds. After a couple of years I pulled the equity out of the duplex and bought a larger rental property with four rental units. I now had two rental properties. At that time real estate was appreciating 10% a year. How could an investor go wrong???

I was so proud of myself. I saw myself as a very successful property owner. I was so stupid. I was just piling up more debt. What I didn’t see was the danger of having one or more units unrented. The rents I got barely paid the mortgage. So, I would have to use money from my savings to keep current. The books don’t tell you that you average about 10% vacancy rates on rental property.

The properties I had plus my house were like “cash cows”. I just kept on borrowing more money and getting further in debt. I was lulled into a false security because I could always get MORE MONEY! By the time I did realize what was happening, I sold the rentals for just enough money to pay off the mortgages.

My house became the “cash cow”. My credit was still good, and my mortgage banker was still only too happy to see me walk into his office. But that was before I lost my job because of “downsizing” at the local hospital where I had worked for 18 years. Oh, dear…now I have no job and no pension since I was forced out before the mandatory 20 years.

As luck would have it, real estate values sharply and suddenly fell in my area. I found myself “upside down”, owing far more on my house that it was worth. I could not sell it and pay off the mortgage.

Now, the high flying real estate mogul was broke! Then I began to dip into the charge cards I had obtained when my credit score was high. The credit card companies kept offering me more credit and sending me more credit cards with higher limits. I was going in the hole about $1,000.00 a month, and living off the charge cards until the four of them maxed out.

I rented out three of the bedrooms to help make the mortgage payments. Tenants would come and go, leaving me with stress headaches and money owed to me. I could write a book about those experiences, but that’s another story.

Our state has an agency to help people keep their homes by offering free advice. They will work with the banks to obtain a loan modification that would lower the monthly payment, but I am beyond that. They advised me to take a “short sale”, but that would only pay what the appraised value of my house is: Not what is owed. I could see no advantage in that option. Foreclosures are quite common in my area, but they occur usually because of other circumstances, not because of foolish decisions like I have made. Even the nice lady at the agency said if I were her Mother, she would advise me to just walk away and not look back.

In my state I am told it is taking the banks at least a year before they actually evict the homeowner. I should have time to sell or give away all of the 100 Hummel and Norman Rockwell plates I have collected over the years when I was flying high and rolling in money. I filled my house with antiques that my children have absolutely no interest in. They have made a list of my things they do want, though.

Reasons most people go into Foreclosure:

• Job loss / unexpected unemployment
• Sudden illness or medical emergency
• Death in the family
• Divorce or loss of second income
• Excessive debt obligations
• Job demotion or promotion denials
• Inability to pay an adjustable interest rate that increases
• Unexpected major home maintenance expense

Notice “Making Poor Choices” is NOT included as a reason!

Please don’t misunderstand. I have a wonderful family and I can count on them for moral support, and they would never see me hungry or homeless. They understand the stress I have been feeling and they agree this is only solution. One daughter has a cute little two bedroom apartment as part of her house. I will live there. She also has a nice big yard that I can garden in. I know she has selfish reasons, too. She knows I’ll have her dinner cooked for her when she gets off work in the evenings. I can keep her laundry caught up, too.

Well, this is my story of how I will lose my home of 35 years.

Believe it or not, I am getting excited about decluttering and cleaning my house. I haven’t missed a mortgage payment yet, but there is no way I can pay the bank next month.

My biggest dilemma so far: What will I do with the 43 annual Family Albums I have lovingly kept? No one child has room for all of them: Maybe they can divide them out between them.

I hope the bank will give me time to paint that front porch and to prune the roses before I leave.

I have put a lot of blood, sweat and tears into this old house, but I don’t regret anything. I’m the kind of person who can meet challenges and welcome changes.

It will be a while before the bank actually comes to padlock the doors, and when that day comes I will give them the keys to my old house. I will try very hard not to let them see me cry.

I have racked my brain to try to prevent foreclosure on my house. I have weighed all my options.

I do not just want to just walk away and let the bank take my house. I believe my best option will be to do a "lein in lieu", which simply means I can deed the house over to the bank.

That will protect my credit, and the bank will give me $3,000.00 to help with moving expenses.

I applied for a Deed In Lieu and was declined by the bank. My final decision was to just "walk away".

That is exactly what I did. I found a very small apartment and moved. It's been almost two years now. It takes the bank a long time to go through the courts to actually come and physically lock up the foreclosed property.

I try and not think about my beloved old house. I never go by there anymore. It is just too heartbreaking.

I enjoy living in my tiny space. I do miss my garden, though. Now I garden in containers on my tiny porch.

I wrote two articles about my adventures in moving and restoring my old house. Come and read about how it was done:

These are articles I wrote about some of my do-it-yourself projects around my old house