That felt like shit

I usually don’t post about my personal life on here. There’s several reasons for that. But, sometimes being fractionated doesn’t feel good. I think many other people may be in a similar situation. So, I am writing about this on here.

I just got off the phone with my home loan company. When we bought this home, it was always a seller’s market in South Florida, and real estate was the only intelligent investment left. We bid on our house within hours of pictures going up on the realtor dotcom site. Home buying was a full contact sport, with just as many speculators and flippers searching for homes as there were people looking for a place to live.

Even though it felt weird and almost fraudulent moving into a house with the price tag we qualified for, we didn’t commit fraud to do it. We moved into a middle class neighborhood into a modest 1,400 square foot house. We moved as far west as we could and out of Miami Dade county into the neighboring county to find a less expensive neighborhood. Trust me, I scoured the home prices on every home in a neighborhood with A schools, and this was the cheapest one within an hour’s drive.

I knew what an adjustable rate mortgage was. I was working, making a good income, and going to school to be a midwife. I thought I would be practicing by now. We refinanced to a flat rate loan with a higher monthly payment so we would have more equity paid in the house and wouldn’t get smacked with a balloon payment. Thanks to a loan / investment from my mother, we had a substantial down payment on the house and were nowhere near over our heads. Because of the crazy bubble, when we refinanced our house was worth so much more, we were able to bundle our car loan into it, and our car was paid off. We still had tons of equity.

Well, then the housing market crashed. I was in medical school and not a midwife, and had no income but student loans. My husband, a public school teacher, no longer could coach after school or teach summer school, since the school district has slashed both programs. Last I checked, our home has lost almost half its value. For the first time in ages, people are leaving South Florida.

I just fought off tears on the phone with a representative at my bank’s “modification” department. I was defending myself, telling her we didn’t have a “sub prime” loan that I knew of, and that we were hard working, honest people, not deadbeats.

I got an email from my uncle, (who has since died, may he rest in peace) making fun of people who were losing their homes. When I listen to the radio, there is a right wing talk show commercial (not listening to a right wing station, but I guess they advertise on there) in which the host screams “Got a sub prime loan? Pay it back!!” like people who are struggling are somehow to blame when the “free markets” these people say are the answer to everything are what put us in this situation, not poor decision making on our part.

Anyway, I have 11 pages of paperwork to fill out, and then a 90 to 120 day process to look forward to. We are not in bankruptcy or foreclosure. But, we have sacrificed everything to continue to pay this mortgage. We have been putting groceries on a credit card and are behind on other payments. We had to ask for help paying for a birthday party for our son.

Anyway, I am not looking for sympathy or a handout. I am looking to humanize the foreclosure crisis. I get furious every time I hear a news report about it discussing the banks. What about the homeowners? What about the real families whose lives were those so called “worthless” sub prime loans? When you hear numbers in the hundreds of thousands of loans that are in foreclosure when we hear these stories about these poor struggling banks…where are those moving vans going to?


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15 responses to “That felt like shit

  1. I was listening to one of the This American Life podcasts recently about how the bank loses too on the foreclosures. Say you bought your house for 400,000 and it’s now worth 200,000. For the bank to buy it and sell it they are out 200,000. For them to change your mortgage to sell it to you for 350,000 or 300,000 makes your mortgage payments easier and they lose less then they would with foreclosure. Win-win.

    • MomTFH

      This is what I am hoping for. It would take forever for them to sell it in the market in South Florida unless they sold it for rock bottom.

    • I almost feel like the only reason banks don’t do that is because they love the misery they create. Otherwise why wouldn’t they? Don’t they exist to make money?

  2. I am sorry to hear of your troubles. It must be very distressing. Having a financial crisis makes it so much harder to concentrate on other stuff.

  3. Hugs! I have quite a few friends in your situation. They didn’t get crazy loans, but the market where we are (california) has plummeted and now they are screwed. More hugs!!!

  4. Sorry to hear about this. I know how hard money stress can be, and how hard it can make everything else seem, too. Thinking of you.

  5. Aimee

    Thank you for sharing this. Know that you are not alone….we chose a reasonable house, in a reasonable neighborhood, for quite a bit less than we were approved for. Now 4 years and 1.5 kids later we are wondering if there is anyway for us to stay in the house. My next step is to make the call you did today.

    I hope you are successful!

  6. emmy

    We can’t even get the loss mitigation/loan modification people to return our calls.

    • MomTFH

      I am so sorry. I heard a radio show that had people saying this. The banks got TARP money and are doing better. But, few of them are really putting a good effort into helping homeowners.

      They do have a vested interest to not foreclose, you would think, unless there were buyers lined up. I hope you find someone who will help you.

  7. jendajen

    Oh sweetie… It is SO rough out there right now. We thought we were getting such a good deal on our house too, it was listed for 40 grand more than we bought it for originally. In the Seattle area, houses have been crazy expensive for years. We bought at the peak of the bubble; and are also upside down in our loan.

    I hope your lender is able to work with you. We almost lost our house too this year; when my husband was laid off we were literally two months from handing over the keys to the county; there’s a program where you can clean up the house and get it sale-ready and they will pay you for the work and you just hand over your keys and walk away.

    It stung; we also don’t have an ARM or anything like that; we have never paid late or missed a payment on any bill.

    Your lender has a vested interest in helping you stay in your home. Nobody wins if you go into foreclosure. 9 months ago; staying on top of the bills looked like a penalty – I’m serious. It was so frustrating not qualifying for anything because we had sacrificed and worked so hard to stay afloat despite having little income! There are more programs now, and you are rewarded for staying on top of things if you do end up needing to get out or get a modification.

    Here’s a couple links:

  8. We went through something similar. We bought a condo when the market was hot, and expected things to work out. We had good enough credit and made enough money to qualify for a conventional loan, but our slimy realtor and slimier mortgage broker talked us into taking a sub-prime rate because they said it would help us in the long run. Don’t ask me how that makes sense. We were stupid, and these two people were FRIENDS of my husband, so we thought they were shooting us straight. The seller also said that we had a $25,000 deeded parking space (something our lawyer signed off on) and it simply did not exist (which we found out from building management later). So we paid an extra $25,000 for NOTHING.

    About ten minutes after the paperwork was signed, the bottom fell out of the market. We went $40,000 in debt on credit cards to keep paying that mortgage. The biggest problem was that the area we bought in was horrible. Shootings and drug deals going on all hours of the night (it’s quite common in Chicago to have really nice housing on the same street as Section 8 drug havens.) When I was 9 months pregnant, I walked right past a shooting that was about to take place. By the time I got into the building, the dude was dead. We just had a baby and couldn’t possibly stay there one more minute, so we had to get out. We couldn’t sell the place because it wasn’t worth the paper it was written on, especially since the parking didn’t exist, and the bank who originally financed the loan lost their license to write loans in this state (surprise!) and our loan was sold to a bank that refused to help us renegotiate the loan.

    After months and months of drowning, they told us the only way they’d consider helping us out of the loan was if we defaulted on it. They advised us to stop paying it, and after 60 days they would help.

    Ultimately, we stopped paying it, moved to the suburbs into a non-gang-shootout neighborhood, and did a short-sale on the condo (sold it for $30K less than we paid, and the bank accepted that.) This was 2 years ago, when my older son had just turned 1.

    That mortgage ruined our lives for a very long time. We will probably be paying off that debt for at least another 3 years. Recently my MIL paid the banks off so we didn’t have to suffer the high interest rate, but we of course still have to pay her back.

    We weren’t bad people who were trying to get something for nothing. We were hard working people who believed what we were told. Everybody else was doing it at the time, so it didn’t sound that crazy. Plus, nobody in my family ever owned anything so they couldn’t give me any advice on how things worked. We were taken. Plain and simple. And I think it has happened to a lot of really good people. Not everyone affected by the housing market is a loser.

  9. Ella

    I hear ya, sister. I submitted all my paperwork to my bank to try for a mod on May 18. It’s now Sept 17 and I still haven’t been assigned a case manager. And I have an attorney calling and bugging them weekly!

    Buckle up, it’s going to get bumpy. Best wishes for your eventual triumph over hardship.

  10. MomTFH

    Thanks for all the supportive comments. Good luck to everyone out there who is dealing with this crisis.

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