How I almost lost my house
Filed under: Home, Real Estate, Recession
The banks are halting foreclosures, and some people across the country are sighing with relief. I know how they feel. Back in 2007, I was one of them.If you haven't heard the news, on Friday the 13th, a lot of unlucky people received some lucky news. Two of the country's biggest banks, J.P. Morgan Chase & Co and Citigroup Inc., announced that they are stopping the foreclosure proceedings while the Obama administration hammers out its plans to try and help more Americans save their homes. And it's hardly a permanent stay-of-execution. J.P. Morgan Chase is only halting new foreclosures for owner-occupied home loans until March 6, and Citgroup until March 12, or sooner if the Obama administration finalizes the details of its loan modification program earlier.
This temporary moratorium came about just days after bank executives were brought into the House of Representatives. The chief executives from Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley, State Street and Wells Fargo were all on hand, and by all accounts, it wasn't pretty.
For their role in the subprime market debacle and all of our other economic problems, Massachusetts Democrat Michael Capuano told them, "I can't believe no one's prosecuted you on this. It's my hope that you will be answering for that in court one day."
And Jeb Hensarling, a Republican Congressman from Texas, promised the bankers, "You will be publicly pilloried," and added, "some of that will be richly deserved."
So, gee, amazing, isn't it? A few days later, and two banks are suddenly finding it within their means to help people with lesser means. But never mind why it's happened, I'm just glad that it has.
As I mentioned, I kind of know what these people are feeling. In early 2007, there was some change in staff at a couple magazines I was writing for, and a year-long writing project that had paid well came to an end. My funds dried up quite a bit, and suddenly I was late with my February mortgage, and then my March. I think I paid February's mortgage payment in April, and by May, probably was willing to pay March, but as anyone who has fallen far behind on their mortgage knows, eventually it's an all-or-nothing proposition. If you owe six months mortgage, and you send them enough to pay for two months, they won't accept it; a mortgage company will return your money.
Although you can sometimes work out a deal where you'll do something like pay just the principal for a couple months, once you're seriously late with your mortgage, it's a deep hole to get out of. And when you're short of cash, you think to yourself, "Well, do I want to pay my mortgage but not have the revenue to pay my electricity bill?" And so you make choices, and not necessarily good ones.
For whatever reason, 2007 turned out to be my recession, more so than 2008 and even 2009. That entire year now feels like a hazy dream, a dream I'd rather not think a lot about. I certainly was working, writing a lot and promoting my book that had just come out, thinking that all of those sales would help lift my fortunes up (yeah, that worked out well), but the assignments simply didn't come in as much as they had in the past.
As the summer ended, I was about five months behind and receiving ominous letters indicating certain doom from my mortgage company.
When I received a letter telling me that my house was going to be put up on an auction block, that was unpleasant, but what really rattled me was an unexpected visit from two nattily dressed people, a sober-looking man and woman who appeared on my driveway one afternoon.
While my wife and daughters watched from the living room window, I listened to them explain how they could help me save my house. Obviously, they had found a public document mentioning the status of my residence, and then raced over in their car. I accepted their business card to be polite, having no idea if they were legitimate or not, but somehow the encounter on the driveway made the upcoming sheriff's auction seem all the more real. I think that snapped me into action.
In any case, I solved my problem by doing what I should have done all along: staying in better touch with my mortgage company. Believe me, I did keep them informed of my situation during the spring and summer of 2007, but during the fall, I was calling them every week, or at least every other week, as opposed to every two months. And eventually, as I had been afraid all along, I wound up getting my parents and mother-in-law involved.
In November, 2007, when I was seven months behind on my mortgage, and 23 days before my house was scheduled to be auctioned to the highest bidder, I was granted a loan modification.
It's a loan modification plan that the Obama administration is trying to construct for homeowners now.
I lost all of the accumulated equity in my house, which wasn't too much, because there was still a few thousand dollars that needed to be paid afterward. My parents and mother-in-law, whom I will always be supremely grateful to, pooled some of their resources, and suddenly I was caught up on the payments. My mortgage ended up climbing another $100, which worried me at the time, but I haven't had trouble paying it since.
Obviously, many of the Americans whose homes are in danger of being foreclosed never should have gotten a house in the first place. We all know that giving home loans to people with shoddy credit and few resources is a large reason our economy is in the tank.
But I didn't have a subprime loan; what I had was a very bad year. For many people, their bad year is 2008 or 2009, and unlike the banks or auto companies, distressed homeowners aren't asking for a billion dollar bailout. They're asking for some mercy, perhaps, to be given loans with a lower interest rate. They're asking for the gift of time. But it's not as if any homeowner expects to be allowed to live in their house without paying serious money.
I know that not everyone will agree, but if the government and banks can work out a deal that readjusts some loans and allows people to climb back up on their feet, I can't help but think that's a good idea.
Geoff Williams is a freelance journalist and the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America (Rodale).
Reader Comments (Page 1 of 1)
2-13-2009 @ 5:29PM
sarah gilbert said...
great post and an honest story, Geoff: I too was behind on my mortgage several years ago, similar circumstances, and I think at some point you just see the payoff notices and want to shut your eyes and put your fingers in your ears and start singing LALAlalalala! we were 180 days behind when the vultures started showing up offering to buy our house at a screaming deal. luckily, we had a lot of equity and were able to work out a deal with the mortgage company. but it was amazing how quickly you can go from one month to four months behind and then have no. idea. how to dig yourself out.
now the priority is groceries, mortgage, and everything else, in that order; but it's also true that your power, water, gas and phone seem far less negotiable and, in a pinch, it's hard to ignore the lights going out in favor of writing a check to some faceless bank.
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2-14-2009 @ 7:09AM
Teresa said...
We are in the same situation and I am so tired of the run around I am getting from our mortgage company. We fell behind in November 2008 after I had fell and had to have knee surgery and was out of work for 6 weeks. I called them right away (Nov) and was promised Hope for Homeowners program. I sent in paystubs and was told to wait, it would take awhile to process.Now I lost my job. I kept calling them and every time I called I would get a different story, down to one evening around Christmas I called and spoke to a man that told me, yes, they've modified your payments and you should receive the documents by Dec 28th. Wow, great I thought, some help. Merry Christmas! NOT! They lied again. No papers ever came, I called them numerous other times. Foreclosure notice came Jan 14th, We scraped together money to send them one months payment, which left everything else neglected, even our groceries. I got a letter from them this week that said your request for help has been denied because you failed to send in the documents that we requested.Another lie! I have proof that I sent them in but will that matter?? When I sent the money into them, they waited until the 11th of the month to post it to our account even though I mailed it out on the 4th and so they could add more late fees after the 10th of the month. Where is the money going that the government gave to them to help people?? Certainly not to help homeowners!
HELP! We need to stay in our home!
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2-14-2009 @ 10:04AM
Roses said...
I whole heartedly think that the American Citizens should get a quick bail-out of a one time One Million Dollar grant from the government....See how fast our economy jump-start! But that's a far fetched dream because our government want citizens to be always obligated to the financial institutions. What do you think, America, is this or not a good plan to get people out of debt. Voice your opinion and those who have political clout...Speak or take it to the White House about the "One Million Dollar Grant!
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2-15-2009 @ 11:36AM
T said...
I think it should be a reasonable $100,000 per person who is a taxpaying CITIZEN. You don't get it if you never paid into the system. This would make a 2 parent household, $200,000.
This is the answer. All we are doing now is paying for these million dollar bonuses to the CEO's. They should be in jail. Blago is nothing compared to what these CEO's do. They are taking our money for their lives. What about our lives.
I agree, give the money to the people and that will restore our economy! We'll spend money then! Pay our bills and mortgages - thats how these businesses should get money....not from the government!
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2-15-2009 @ 7:01PM
mikey said...
Our country has become a bunch of whiners. Oh my I can't afford this or that please don't take it back.
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2-15-2009 @ 4:48PM
Chris Taylor said...
I will never get a mortgage. I will live in a hole first.
Here is why. I was at my local bank (BOA) and I saw there home mortgage poster. 6.7% APR 30 Year Fixed. Pretty standard.
I was thinking 6.7% is not too bad thats only $6700 per $100grand. Thats actually a pretty decent rate. A FAIR rate considering the size of the mortgage. (I refuse to call them "loans" since the bank is not actually LOANING you any of its money)
Anyway then I noticed APR. hey thats like a credit card and then it HIT ME wait a minute its 30 freaking years.
I found a mortgage calculator online and "punched" in the figures for a $200,00 mortgage 30 year fixed 6.7% apr.
132%
Let me state that one more time. Thats an interest rate a REAL interest rate of
ONE HUNDRED AND THIRTY TWO PERCENT
DO you people REALIZE just how LUDICROUS that is?
132% !!!
for that $200,000 home you will pay $464,000 after 30 years of payments!
$264,000 IN INTEREST !! thats MORE than the cost of the home !
132% more !
I can't help but wonder this.
I don't think a fraction of the people currently in trouble with banks and there mortgages would be IN trouble if they were not permitted to RAPE AND PILLAGE YOU for 132% Interest
HOW precisely is that even legal?
This is INSANITY. Over my dead body will I pay 132% on a "loan" not even close!
Get that down below 10% and MAYBE we can talk. otherwise I have ZERO interest at all.
I will live out of a damned cardboard box before I pay someone 132% interest !
THIS is the core problem here folks. Its not the credit worthiness its not the financial resources.
Most home mortgages would have there monthly payments cut by more than HALF if they simply had FAIR interest rates.
MOST people could afford to BUY a home for $400-$500 a month which a family working FAST FOOD could afford!
Its not the homes or the income or the "credit" score that is screwing home owners. its the 132% interest thats screwing them!
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2-16-2009 @ 8:26AM
nancy said...
I too am losing or should I say lost my house. The mortgage company lied to us as well. They said I did not send the paper work on time. I have a receipt proving I sent it over night on the first and it was sighed for by someone at the mortgage company on the 2nd. They sold my house on the 3rd. We tried to get in touch with the woman we talked to everyday before they sold the house,but our phone calls where sent to INDIA!!!! They laughed at me when I asked how to get in touch with the woman we had spoken too. After the paymant and paperwork were sent we didnt hear back from them. We didnt get any letters or the money back. A month later they sent the money back and said we were denied because we didnt send in the paperwork on time. Which is crap because I have proof!!!!! Now I may have to take my autistic son out of the wonderful program he is in. We will have to start at square one. Nobody will help, Nobody knows anything! Nobody will help us buy back the loan because now we have a foreclosure on our credit. What fun these mortgage companys must have doing this to people.
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2-16-2009 @ 8:50AM
nancy said...
I too have I lost my home. The wonderful mortgage company really got us. We have everything set. We were told we could keep our house if we sent in the paperwork and 4grand.My husband was told to overnight it on the first. I went to the post office on the first and sent everything over night. It was signed for on the second by someone on at the mortgage company. We didnt hear from them so I started calling everyday. When I called the number the woman gave us. My call was sent to INDIA!! They laughed at me when I told them I was trying to get in touch with the woman I spoke to. About a month later we got the money back stating that we were denied because we didnt sent the paperwork in on time. WHICH IS CRAP I HAVE PROOF!!! Nobody knows anything, Nobody will help. My autistic son now has to be pulled out of the wonderful program he is in. Well, they signed for the stuff I sent in on the 2nd and as far as I know they sold my house on the third and and almost a month later they told us we were denied help. We have tried to buy back the house but now we have a foreclosurer on our credit. We did everything we were supposed to and they still did this. We have a great case against the mortgage company but I dont have the 10grand to pay the lawyer to take this to court.
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2-16-2009 @ 7:28PM
Helen said...
First, we live in the GREATEST country on earth and I would not want to be anywhere else with my issues, next as a former mortgage company employee I must tell you it is critical that we become a nation of READERS, so we can read and understand exactly what we are signing. Right there at the start of any commitment to debt, especially for a home, we as consumers should have a Plan B, in case of emergency. Thats where you start to ask "what if" questions to protect yourself. Don't be afraid and take responsibilty!!!!!!
I like the old saying "the squeeky wheel gets the oil", so call your mortgage company every day, call your local and state elected officials, United Way, Catholic Charities, RedCross, Legal Aid Society, be the person who won't take NO for an answer. Go to a local branch of the lender instead of calling and ask them to call, try everything and tell everyone, ask for help from church, family. I could go on forever, but you get the idea, be blessed :)
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2-16-2009 @ 2:32PM
Capri said...
I have to disagree with the statement that too many people took out loans they couldn't afford-just that simply. NO, no, no. People were taken advantage of by thousands of WALL STREET CROOKS who's sole interest-(INTEREST) was to take people for everything they could, then take the property too when they the balloon payments hit, & the house was foreclosed on. WHO WINS? The banks & mortgage companies who took every last dime from the poor schook who blindly signed their lives & assets away, being told by these LOAN SHARKS not to worry. They can refi-when the thing comes due. Property VIRGINS were RAPED by these bastards all over this country. The bankers, the mortgage companies, & everyone who was paid to talk people into these loans all got BIG BIG money. The morgage processors are paid commission on each loan, not paid salary. The only incentive was to write as many loans as possible-not to look at the papers. Different demographics of people were victims of this scam, starting from legit buyers & ending with the not qualified at all. In the end-as stated here over & over-the banks still end up with your money, & the property too. And the WALL STREET MAIN STREET RAPISTS, walked away. And don't be naive in thinking the FEDS didn't know what was going on. Government officials are bought as easliy a hooker on 14th Street in Washington DC. If the Government were not making a profit off this- it wouldn't have been so easy to pull off. The Government is set up to RAPE the honest citizen of every last dime it can by taxing us hardworking SAPS on every paycheck. Then, if GOD FORBID you actually need the help of the Social Security System, or Food stamps, or HOUSING, or any of these other services we pay for- THERE ARE HUNDREDS OF WAYS TO BLOCK YOU FROM GETTING HELP. Look how the Government does not care for the soldiers who are over there fighting for OIL. NOT FREEDOM -OIL! The only people I see around here getting goverment help are the generational abusers & the goddamned illegal immigrants.Gotta put up that front of compassion started at Ellis Island, right?? If you are honest-your'e screwed by the Government. LYING is the way to get help. I'd be better off getting help if I jumped over the border with some wetbacks. Because paying into the "SYSTEM" for 40 years isn't good enough for me. Maybe I'm a whiner. I'm whining now because I feel STUPID for EVER even thinking the Government was "by the people-for the people".It should be-"Buy the politician-FOR the Corporation".Humanity in Government is NONEXISTENT.If this GOVERMENT cared about us as a people, we never would have lost all our industries to overseas. And never allowed foriegn governments to OWN so much of us.. NO-our goverment sold it's soul a long time ago. THAT'S why we are in this depression, & the rich get richer, & the poor get poorer.
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2-17-2009 @ 11:42AM
paul s said...
My insurance broker called back in the fall of '06 and said he was brokering mortgages and wanted to stop by. Because of the grossly overinflated RE market it seems our house had tripled in value. He could get us a no income verified mortgage of up to 250-300 hundred thousand dollars. Thoughts of a "around the world" trip, a fancy German made auto, expensive electronics, all danced around in our head. But, we were in this glorious position because we were prudent in our finances. We were never greedy. We said no thank you. This past spring we sold a second home we had bought back in 1989 at the height of another "economic boom". By 1992 the house had lost a third of its value. I was an angry younger man. I felt I had been swindled. But no one put a gun to our heads and made us sign that mortgage. We paid, we sacrificed, we went without. We sold it for three times what we paid for it. We did not move into it for two years to beat our tax system out of capital gains. We were never greedy. Bankers, brokers, distressed borrowers, now ask for help. They want a bailout and those of us who didn't participate in such greedy, selfish behavior, are being obliged, with our taxed earnings, to do exactly that. I have a question: Why should we?
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2-23-2009 @ 3:42AM
koshcoro said...
The unpaid mortgage payments add up fast. If you get 2 months behind, how in the world can anyone get out of it if they have no equity to refinance out? http://www.findmyloanonline.com
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3-09-2009 @ 8:56PM
Cody said...
Save your proof for court. And DO challenge them! Our mortgage company (BOA) conveniently lost our paperwork and pay stubs, which had my social security numbers on them. Well, in order for them to get the paperwork they "didn't get," we had to fax from a Kinko's. Which prints out a receipt. I told my wife to document and save everything, and those receipts were the answer. We were sued, and in our answer, I included the fact that they lost sensitive information, which shouldn't happen with a banking institute, a list of calls and call times, who we spoke with, who the account was assigned to, and the fax receipts. We couldn't afford a lawyer, it probably wouldn't of helped anyways. After the bloodsucking lawyers read the answer, BOA was suddenly interested in modifying our mortgage. The lawsuit expired(dropped), and we haven't missed a payment since.
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3-18-2009 @ 6:35AM
Angelina Nobles said...
great ilike this post
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4-08-2009 @ 10:21AM
Jay Guy said...
This phenomenon is not exclusive to America, Europe is currently in a terrible position too. It can be a little soul destroying given all the economic issues globally.
Your home is more than just financial investment though, it represents many things and to lose it would be up there with some of the worst things that happen.
http://propertyincalabria.blogspot.com
http://www.firstpropertychoice.com/portfolio.aspx?portkey=9
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