Losing your home is a strange and alienating process. Mine is being lost right this minute, but it’s not the end of the world. Here’s what happened to me this year, and some advice from what I learned along the way. (See also: How to Avoid Foreclosure)
The day my neighbor’s house — twice the size of mine and renovated — sold at auction for $65,000, I knew we were in trouble. We paid $189,000 for 1,000 square feet of non-renovated 90-year-old American dream. But, I thought stupidly, it’ll come back up. Then, six months later, three more houses in our neighborhood foreclosed. It won’t be too bad, I said to myself. Those were old single-wide trailers. They have nothing to do with us. We’ve got a gem of a little house on an acre of land. Surely, it’ll still be worth something. Then, six months ago, the cute, refurbished, hardwood-everything house I coveted across the way sold at auction for $20,000. It had more bedrooms and baths than mine. We were done for.
I tried all last winter to modify our loan without success. We made too much on one application. Didn’t owe enough to other people and weren’t behind, so we didn’t qualify for another.
Then spring hit. Which wasn’t spring, really, but a second winter. Record snow. Record rain. The basement, where the posts and piers are, flooded three times. The water table was so high that the bathroom sink no longer drained. The septic, which had been drained and cleaned the summer before when we replaced pipes, was a mess. Contractors and plumbers said good luck with that — “You’ve got a year before you’re going to have to build a new one up the hill from you.” How much would that cost? All three contractors said $60,000. Oh, and did I mention the bathroom is sinking from the wet ground? I did some investigating, and apparently our whole town is built on top of mine caverns. One good earthquake, and it all comes down.
Math isn’t my strong suit, but even I know that my dinky house, now more than likely worth less than $20,000, is not worth a $60,000 new septic system built on top of a hillside that apparently is just caverns a few feet down.
The bank didn’t seem to think it was worth fixing either. It was worth it that we pay them our mortgage, but not worth it for them to loan us more or modify it for us to fix it. So earlier this year, we decided to leave.
It’s not like us not to pay our bills. It feels weird. Especially the phone calls. We get them every hour from the mortgage company. Once every two weeks I pick up the phone and talk to them. I tell them the same thing each time — we are leaving our house because the plumbing issues and foundation issues have left it near to condemned. You wouldn’t help us fix it. Soon it will be yours.
The representatives are always pleasant. But what can they do? They tell us to apply for deed in lieu. In order for the bank to go for deed in lieu, the house has to be in move-in condition. That doesn’t work for a house with winter storm damage needing a new septic. We had been remodeling the kitchen but never finished. They tell us to short sale — and then they can apply what we make from the sale to the mortgage. No one who lives in our area is going to buy this house. Everyone here knows what the winter did to these houses, and that underneath the house is a cavern waiting for the house to fall in it.
Then I asked my lender the big picture question — which option is better for the home owner? Turns out deed in lieu and short sale are both better for the lender. But for us schmucks in the muck of home-owner disaster, it doesn’t matter much. What does bad credit mean in the US of A anymore?
So the bank calls me all the time now. I’m one of their dead beats.
With the savings of not paying the mortgage for a few months, I paid off a credit card, paid off medical bills, and was able to go see my grandfather before he died. None of these things I regret.
And there’s kind of a happy ending.
When I knew we were going to leave our house, I emailed a couple of friends of mine who have rentals. I stated I wanted at least a three-year lease so I wouldn’t have to move again soon. I’d need time to recover from all this madness. Did they have any open rentals or know a good landlord that did? My credit would be shot. I’d need someone who would take us on recommendation that we were decent people who would pay.
A friend wrote back. She had left the state but never sold her old house. It had been sitting empty for a couple of years. Beautiful house, but no one around here could afford to buy it, and odds are in the current market she couldn’t get what she paid for it. She wasn’t planning on selling it any time soon. She also bought a new house and wasn’t returning. She’d be less nervous about the property if someone was there to take care of it. Did we want to rent her twice-the-size-of-our-old-house, 70-years-younger, completely redone house? Yes, yes we did.
I’m writing to you from the new house. This feels like one of those "only in America" stories. The new home is in a nice area with lots of forest. The old home had a lovely view of my crackhead neighbor that used to weld in his garage at 3 a.m. Now I just have deer to contend with at night — a good trade off.
It’s the community that will help you. It’s friends and neighbors with information. So many are suffering and in different stages of losing that we can all tell each other what’s going to happen next, which hoop to try, etc. I’ve gotten more information from my neighbors during our various yard and moving sales than from anyone in an official capacity.
If we were a corporation, we wouldn’t have thought even twice about cutting our losses and getting out of there. On the books it just doesn’t look right. Why put money into a failing investment? My husband and I are too old for that mortgage deal to ever have worked in our favor. We’d have been dead by the time we owned it anyhow.
Home ownership tends to be emotional, and just like we wrap up our worth in what we do for a living instead our humanity, we wrap ourselves up in our home's success or failure. I, frankly, have had enough of that.
Yes, America, I lost my house this year because by and large I was gullible and stupid and many people took advantage of my stupidity and gullibility. Stupidly, I thought that if I owned my own home I’d feel like less of a loser. I’d feel (there’s that emotion again) that I did something right and worthy of approval. I’m sure I’m not the only one that’s fallen into that trap.
But if there’s any Wise Bread reader out there about to lose his or her home and is freaking out — don’t freak out. We’ve all gone home with the wrong guy before. You didn’t die, and no one broke up with you for a cute young blonde. You helped yourself get screwed by a big giant corporation. They enjoyed it, and you feel cheap and easy. Get your clothes back on, grab your car keys and go. Hold your head high.
I’m a happy renter now. I love my landlady — she’s laissez faire about the right things and concerned about the right things. I love living in a house where everything was fixed and up to code. My kids are enjoying the 1,500 extra square feet. I’m enjoying paying out 300 less a month for a better house in a nicer neighborhood. Maybe finding a good landlord and a decent rent so that we pursue more important dreams than purchasing homes could be the new American dream.
Editor's Note: The views shared by one writer does not reflect the views of all writers on Wise Bread.
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