My youngest son is now an apartment dweller having lost his home to foreclosure. I hope that sharing his story will help all of us understand the process and its huge emotional toll.
His house was in an older area of St. Paul and priced at $235,000 in 2003. It was a small bungalow and not a McMansion. They put 20% down and moved in able to pay their mortgage and their bills. Both he and his then wife had good jobs and were off to a rosy start in home ownership. Several things happened at once all coinciding with the financial meltdown.
His wife wanted a divorce. This by itself is a huge stress producer. His pay was cut by 40% and his hours by 20%. Perhaps he could have survived one out of the three, but all three hitting at once was enough to put him into the foreclosure process. He took in roommates to help share the costs. He did some moonlighting as a handyman. It just didn’t add up to enough.
He was part of the President’s mortgage modification program for 6 months and made every payment on time. By then his work hours had recovered. Month 7 his check was returned saying the program had ended. He now owed the full payment amount for the previous six months. The saddest thing about this was that the program had given him hope and then jerked it away. He was excited and making plans for recovering and then nothing. He was on an emotional roller coaster. On top of the rest of the emotional turmoil and stress, I am just proud of him for still going to work everyday with a positive attitude and being among the still standing. His pay is back to slightly better than when he started five years ago. He has been promoted. It was too late for him to save his house though.
Calls to assistance lines were made. Calls to elected officials were made. People were for the most part very nice, but unable to give him any good advice about what to do next. Elected officials promised to “let the Treasury department know” and said they’d had numerous calls with the same question and did not know what to tell him to do. Free legal aid and foreclosure assistance lines took his name and number but had so many people calling they couldn’t make any promises. The numbers on foreclosure only count the people already in the process. They don’t count people who are dreading the action and trying to avoid it.
There were several kinds of problems. Did the entity foreclosing really own the mortgage or had they sold it? To whom did they sell it? Was the foreclosure part of a processing mill and invalid? What happened to the mortgage modification program? Just sorting out which version of being screwed was happening to each individual is a monumental task. Those trying to help were buried by a blizzard of uncertainty and no responses from lenders. He wasted at least three days of vacation lugging his papers around in search of help. Nada.
He did consult one private real estate attorney who was a family friend and helped him without a fee. This lawyer came back to him after a week and told him that he could not figure out what to do to help him. He’d never seen such a mess in all his years of practice. For a lot of people in foreclosure, they don’t have family friends who are attorneys nor do they have the money to go out and hire one.
Family, trying to be supportive and loving gave him mixed messages. Walk away now, some said early in the process. They may have been right financially speaking but they forgot the emotional drain of being newly divorced and trying to hang onto some part of his former dreams for ‘the good life.’ Others said, “I am with you whatever you decide.” Others offered him a room so he knew he wouldn’t technically be homeless if he did lose his house. Some just listened.
The weeks just before the final eviction notice he had surgery for a cancer scare which cost him, with decent insurance, $6,000 in co-pays. He is exhibit A for the Morning Feature article on lumpiness, where bad things seem to pile on a person.
I think some version of this story is true for every person/family in foreclosure. Whatever the intent of the program for mortgage modification there are lots of folks who are being devastated and we ought to all be careful in trying to give them advice. Much of what we would reasonably suggest is ineffective here. We also need to remember that this process is filled with emotional baggage. Republicans blaming the victims did not endear them to anyone in this process.
We also ought to be very careful in trying to defend a program that offered a shred of hope and then ripped it away. I don’t know if Congress will ever get around to investigating this and holding banks and mortgage companies accountable. For those people affected by this, I don’t suppose it much matters. We have abandoned them and they are picking up the pieces of their lives how best they can. We left them on their own. That might not have been the intention, but is the reality.
The idea that government can help them is laughable to them. Government just proved to them that it could not. Their perceptions of reality don’t care where blame is assigned. Sophisticated policy talk about the banks may deflect blame from the President and the Congress, but be very clear, these folks would love to have someone to blame.
Each of these people has been telling their story to coworkers and friends as well as family members. Once my son got over the feelings of shame, he decided that telling his story might make it easier for someone else to at least recover their pride quicker. He was shocked at how many of his coworkers were someplace in the process and how their being able to talk openly about it helped all of them. These mostly young Freds are likely to not vote at all in 2012. What difference would it make, after all most of them voted for Obama. As the kids say, “So how did that work out for you?”
I share his story to help us decide how to respond to these Freds with empathy and understanding. I am less about assigning blame that I am about encouraging a better way to address this issue going forward. Reading about a double-dip recession led by housing is not fun reading. I have written my Senators, Klobuchar and Franken, and the White House. I really want the Democrats to do better on this issue.