An Open Letter to my Two Mortgage Companies

by francinehardaway on February 6, 2009

Dear Aurora Loan Services (a unit of Lehmann Brothers) and Citibank Mortgage (who took the TARP money):

Between the two of you, you hold my fate in your hands. In July 2005, approaching 65 years of age and having been an enrepreneur for forty years, I bought a home in Half Moon Bay, about three miles from one of my daughters. I put 10% down and got a 5-year interest-only mortgage for about $576,000 and a HELOC at prime +2 for the remainder, about $154,000.

I was really happy to live close to my daughter, and the two of us encouraged my other daughter to move home from the Netherlands to join us. For three years, everything seemed fine. I made friends, I continued to run my business in Arizona, invest in my startup companies, and assume I’d be in Half Moon Bay full time one day. Prescient about Arizona real estate, I sold my house there and rented.

And then two people on my block in Half Moon Bay had to use short sales to get themselves out of their obligations, and the value of my home suddenly dropped. All of a sudden, the home I paid $769,000 for, and then spent $45,000 modernizing, thinking I’d live in it for at least ten years, became worth $699,000.

I’m no dope; I’ve been in business all my life. I saw everybody starting to turn in their keys. I knew it was a bad financial decision to keep paying on the mortgage, but I was loving the house, spending quite a bit of time in Half Moon Bay as my daughter was now pregnant, and determined to make it through this momentary drop.

And then November came, and the value of my house dropped to about $659,000. More important, my business began to go away. And I mean go away. Suddenly, four deals I was in, all of them capable of making me financially secure, either fell out of escrow or went on “hold.”

However, Obama got elected, and I kept on paying. I did make a call to you at Aurora in December, asking if I could get some help, and you advised me that you couldn’t help me because I wasn’t behind. Of course I wasn’t: I was struggling to preserve my excellent credit.

Well now it’s February. I am scrambling for small projects. My deals recede in the background under the weight of our crumbling economy. Congress argues over the stimulus bill. And I have taken a deep breath and realized I am going to fall behind on this mortgage.

Like Rome, I am burning while Congress fiddles. And I’m not getting any younger. I’m an optimistic person, a healthy person, and a person willing and anxious to work. No, I don’t want to move in with my daughters. I want to ask you to re-finance my mortgage at the current value of my house at a 4.2% rate, like everyone in Congress is suggesting.

Otherwise, I have to let you foreclose. And this will not benefit you or me. Me, it will ruin my credit. You, it will give you yet another foreclosed property to sell at even less than if I could keep it for a few years and then sell it for you. And it will further erode the property values in my little subdivision, full of other families.

Do I want to bare my soul to you, or to the online world? Of course not. But my highest and best use right now is to offer myself as an example, a data point. I’m articulate. I’m not a person who should never have been given a mortgage. Not an uneducated victim of a greedy mortgage broker. And not a speculator. Just a person caught in something much bigger than all of us.

I’d like to take a moment to thank my parents and all my teachers, who gave me the gift of writing, so I can at least convey my feelings to the world. Namaste.

Update: I’d like to take a minute to answer you in a group, as many of you are saying the same thing:
1)As for asking for a handout: I’m not. I’m asking for something that will help both of us move forward. I fully believe my business will come back in a couple of years, as it always has. When the tech economy slows down, my business slows with it. When it comes back, it will come back. I had rainy day money. I tried to use it to start a new bank with some colleagues, but the FDIC has held up our charter because there’s so much to do bailing out the bad banks
2)As for buying a house out of greed and living beyond my means, I had the means to buy the house when I bought it, and the means to pay for it for four years. Hello, my business stopped in November. And what happened to everything else in November? Same thing.
3) Unless you have full access to someone’s financials, you can’t accuse them of greed for buying a house that costs $769,000. That happened to be a low end home in the Bay Area when I bought it
3) I’m alarmed at the schadenfreude shown here. Even if you live below your means and save for a rainy day, there are life events that can take you down for a while. When those events occur, what I was trying to demonstrate was an entrepreneurial way to create a win-win situation.

Clearly, many of you are in the win-lose zero sum mentality; if I win, somehow YOU lose, because you are paying taxes. Did it ever occur to you that a person who can afford the house I could afford in 2005 pays taxes, too? When you have paid taxes for fifty years (although I hate to say it), you can tell me I have no right to a mortgage modification because it will affect your taxes. It will also affect my children’s taxes, and their children’s. Yes. And I wish Bush hadn’t spent our tax money in Iraq for the last six years. That was MY money.
4) At the end of the day, thank for your comments, although some have disturbed me because they seem not to care that someone is losing her home. They have, indeed, taught me that the way I live is not the norm. I guess I don’t have to create jobs anymore for you guys, because you are safe with your 30-year fixed rate mortgages and don’t need me to take anymore risks on your behalf. But I do now have a better idea why the mortgage modifications haven’t been done earlier at the government’s stipulation.
5) If your comments do not appear, it’s because AKismet thought they were spam. I let every one through that I saw, and answered a substantial number of them in an effort to keep the conversation going, as the blogosphere demands. This is, after all, the country of free speech.
6) Look into your hearts. What is happening in our country isn’t about money. It is about closed off hearts. I have had a business setback. We all have them. We all fail. What is wrong with asking the bank to cooperate? If the bank can ask for $50 billion, I can ask for a lower mortgage rate. The bank can say no. And I can be foreclosed. And prices can fall further, and neighborhoods degrade.

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  • mike552
    Interesting blog. I found it as I was searching for a solution to my situation. Very similar, but on different levels.

    I have actually moved friends into my home to help pay bills and have maintained my 720+ plus credit score. Unfortunately all good things come to an end and I know my rates will go up at some point and there will be nothing I can do about it.

    I wish I could better understand how the banks allowed these mortgages to be sold on the open market. They offered insanely awesome deals that I ignorantly grabbed onto and now I am trapped. I don't mind paying the price for my mistakes as long as everyone that made mistakes pays with me. I do find it frustrating that the banks received bailouts and they get to go upon there merry way.

    To answer everyone's question, my mortgage was sold on the secondary market. There are NO modification programs for this type of loan. As I was told.

    I'll eat beans and rice to pay my bills, I would just like to know what's the best direction and if there is a chance? Do I really need to let everything go before I can get help? I would much rather take my medicine. After all, I'm a Marine, there is not much I haven't endured.

    At some point when rates climb, I will be stuck, that's the realistic part. No equity and upside down. Stones are welcome, but direction is preferred. Thank you.
  • Actually, there are now modifications available for these kinds of loans.
    The best bet is to call your servicer. I actually spent one year working
    with mine, but it looks like I got a modification. I did what you did; moved
    people in with me.
  • MN
    Such an excellent, well composed letter and eye opener!! Thanks for sharing it.
  • Eric
    While I sit here an read everything, all the comments and not one person states the true facts.
    The fact of the matter is we as a society have allowed the lenders to promise the world without any just believable reason that all would come true.
    I will be the first to admit that some of the problem lies at the foot of the borrower, who for whatever reason allows the lenders to think all will be ok. The truth of the matter is all MAY and I mean MAY be ok should things keep rolling along and all promises made live up to their protential. Reality is this is very rarely the case. Lenders allow borrowers to get in way over their heads and the repercussions are they go bankrupt and the lender forecloses. No foul right?
    Of course there is, the lender should be looking out for all involved and that also means me the investor,
    A lender who looks only at the best means of making a buck without looking at the long term implications do not deserve the right to foreclose or cause harm.
    One only needs to look at how messed up this world has become, we have lenders sitting there begging college and university student who are just kids to go into debt up to their eyeballs, without even blinking an eye. Our children are being taught, debt is a good thing. Just look at the average student loan in any country. Most students without well off parents who can afford to send their children on to higher education are in debt for 1000's of dollars before they even get their first real job.
    The sell job is borrow now, when you get out you will be making enough money to easily pay off these debts. Then the crash hits, no jobs to be had anywhere, certainly not for a student just out of school with no real experience to speak off. Now the students the same as the over extended borrowers can not pay their loans, the lenders cry foul and beg for tax payer relief and get it, but the poor borrower who may or may not of ever been given the loan loses all.
    The arguments heard here make very little sense to me, to say one person is at fault because a lender has allowed them to get to the point of no return does not wash, a lender should not be lending money unless they are willing to take the loss period. If in the real world all at fault paid the price maybe things would not be were they are today. For each loan unpaid just adds another payment to those of us that can pay. The lender forecloses, all the cost and loss that the lender entails just gets dumped onto those that can pay. It can be in the form of tax relief to th lender, a bailout or just increased fees because the lender needs to make up for its loses.
    In the end we are the ones paying and therefore should have some say in what is happening to the credit market. I for one would sooner see people paying whatever they can and keeping them in their house, even if it means morgages with no interest.
    Lenders need to be found accountable for the actions they are doing. We need to get back to reality where those who do not have the means to pay, do not get the loans.
    People who feel I have do everything right, I live within my means, I own a smaller house or rent etc.
    Reality is that currently you may live within your means, this does not mean you always will.
    Rents can skyrocket, interest rates can skyrocket, taxes can skyrocket and honestly all of these things will happen if we are to get out of this mess, just the facts of time proves this. A correction will need to be made at some point in time.
    Just in the last 3 months at where I am employed 750 employees were let go, all with 20-25 years of stellar service. Ask anyone of those 750 people if they ever thought this would happen to them?
    I would dare to guess that not one of them would of.
    How long before these people begin to run into the same problem with their credit ratings?
    Do we just blame them?

    Everyone needs to give their heads a shake and ask what can we as a society do to improve things and lay the blame where it belongs on the lenders who are so eager and willing to loan money out like it was water, without once looking at the person they are lending too!
    JMO
  • Linked today from an old Dave Winer post to your piece. Wonderfully written piece, examining a complex, difficult issue in a logical way.

    What was the fallout of your request?
  • vickie
    sorry for your troubles. i am currently in a hopelessness mode (hence no caps because it's easier to type this way). I need to just talk because if i don't i might do something stupid. my husbands' father screwed us big time with a prior business. he sold it after he a family discussion and left my husband out of the loop. we received nothing except all the debt. while my husband and his dad made up (which was a good thing because the old guy died 4 years later) we had and received no money. the business wasn't a big deal but when we purchased our house it was enough money to pay a 700.00 mortgage a month. we had trouble finding jobs. without going into much detail after aabout 3 years we were bringing our life back to somewhat normal. we still a back payment of 2000 on the house but had a plan worked out with the then current mortgage lending. ocwen took over and our livves went down the tubes . they refused to honor the agreement asked for money we didn't have and wow after 15 years of hell and a tremendous amount of ruined credit -- we declared chap 13 numerous times to stop them worked deals but they were always way more than we could afford. we tried but we lost the battle after the last hastely put together deal they gave us a payment they thought we could afford. everyone or most people jump at the chance to keep their homes and we agreed but i believe we have the war. we are not blameless -- but we are certainly naive in the ways of the financial world. it is the most frustrating thing when the mortgage company is in another state and you don't know each other. we are not bums or lazy or irresponible we were told to sue the "parents" but how can you do that? we owe back payments of about 20,000 on our house with interesst penalties etc. etc. etc. etc. whatever ocwen wanted to do they did. attorneys told us it was hopeless and no one cares. i guess they were right. i am in the gutter now feel totally hopeless and thank you for the oppotunity to air this
  • Sucks, Vickie. Your story is everyone's these days. Here's what I've learned: 1)the US does not have debtor's prisons, and it's no shame to be in bad financial shape during this period. 2) All the money keeps going to the fat cats -- banks and mortgage companies 3)If you quit struggling and worrying, you will live a longer happier live. That's what I decided.
  • maggy08
    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Susan

    http://pay-dayadvance.net
  • maggy08
    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Susan

    http://pay-dayadvance.net
  • Bilger
    Wow!

    "I guess I don’t have to create jobs anymore for you guys, because you are safe with your 30-year fixed rate mortgages and don’t need me to take anymore risks on your behalf."

    You seem to have a passive/aggressive victim complex combined with delusions of grandeur and a nice dose of paranoia. Get over yourself.
  • Rob in Gallup
    Look, I realize you're in a tough spot and I'm not trying to take a cheap shot while you're down. But you put this out in a public forum, and as a member of the general public, I'm going to take that as permission to share my thoughts.

    I'm an entrepreneur, too, and I don't buy it that your bank needs to rescue you.

    I make decent money, enough to provide for our four children and to allow my wife to stay at home, go to school, or have a career as she sees fit. We live within our means, which means not having massive debt over our heads that we might or might not be able to pay later. We chose to live in a house we could afford, not a house that we thought we could afford "monthly payments" on. That's called living within your means, and it's kind of a radical concept in America.

    Now, of course, even though our house is nice and is adequate for our family, we too aspire to bigger, better and nicer, so we continue to put money away toward buying a larger house eventually. The difference here is that we won't buy it until we have the money in hand rather than relying on fictitious money (i.e. credit, the polite term for incurring massive amounts of debt) to pay for what we want but can't afford.

    So I have a really hard time buying into this argument that you were somehow smart about things. Smart is not saying, "Well, I have enough money to get banks to allow me to incur over half a million dollars in debt (on a SECOND HOUSE, no less) and since I can presently afford the monthly payment, I'll go for it." You don't automatically qualify as smart, either, by being wealthy enough to receive large amounts of credit, or by being an entrepreneur for decades, or by being a good writer (which, to keep the ego in check, you're not a bad writer but you're no Hemingway, at least not from this open letter).

    And I don't buy that you're just caught up in bad circumstances. Being the victim of a bad situation is being paralyzed and no longer able to work, or having to spend your life savings on medical bills not covered by insurance, or having your home destroyed in a natural disaster. But counting on future income that you haven't yet earned, then recklessly incurring massive debt, and then being unable to pay back your debt when inevitable economic changes occur is not being a victim. That's called making poor choices.

    And I daresay it's these common, but nonetheless poor, choices that many Americans like yourself have made that are responsible for the financial meltdown we're witnessing.

    As for my family and me, we may not have multiple mansions, but we're largely unscathed by what's happening in the financial sector because we haven't set ourselves up to be affected by it. I'm not going to lie, that's a really good feeling.
  • I have a lot of sympathy for anyone facing the loss of their house. It is not an something I have ever faced or would wish upon anyone. Having said that, this post highlights to me two of the fundamental problems that helped create the economic crash we all face.

    Firstly, buying anything on credit without the income to support the loan is a big risk. Admittedly, this is a tough one for the self employed. I also work for myself. Not every self-employed person will have sufficient confidence in always being able to earn enough to pay the mortgage. If in doubt, rent.

    Secondly, and most crucially, a home can never be a speculative asset. It is worth nothing. You cannot sell it. Its value to you is purely as a means of warmth and shelter. Far too many people in this country (I am in Scotland) bought their house, and a lot more beside, because prices were rocketing skywards. Nobody seemed to recognise that if the property is sold at twice the price it was bought at, the owner is only going to have to pay the same amount for another house!

    So I say to you Francine, concentrate on your business. Develop that and if necessary, find an accountant to help you manage your cash. It doesn't matter what your neighbours are doing. Your house is your home. You live there because it suits you to do so, not because it has a market value of this or that.
  • I feel sorry for you but in a different way. Your simply a victim of your own greed.
    Did you ever think that that the other 600,000 or so you borrowed to finance your castle, was actaully money that someone else scrimped and saved?
    I am Canadian, the same thing is happening here, only two years later than the USA, and god help us is all I can say.
    I listened for years to all the fat egos, living in luxury, bragging at the cocktail parties about thier rising property values trading ,up constantlytaking out equity in thier grossly inflated house prices to finance lavish lifestyles, living in mansions with vaulted ceilings, buying cottages for 'investment" etc.
    These same business people scream at the municipal politicians to lower thier damm business taxes, then they take the money they saved and spend it on winter vacations. I dont feel sorry for anyone, in fact Im laughing at how stupid you all look now.
    And whats worse, you people who overpaid for yoru houses, were victims of the con artist mortage and real estate brokers, now send all your "toxic assets" overseas so now the entire world is a victim of the rapacious greed of Americans. phooey...
    Sell the damm castle and live in your means, even of it means renting a tiny apartment.
  • I have a comment still sitting in moderation too.
  • antediluvial
    "However, Obama got elected, and I kept on paying. I did make a call to you at Aurora in December, asking if I could get some help, and you advised me that you couldn’t help me because I wasn’t behind."

    Enough said. Your an idoit looking for big fat government for direction. Grow the fuck up. Send the keys in the mail and let the market figure it out.

    Your responsibility is self preservation.

    Our country would be a lot better off if we esteemed self reliance.
  • This is sad. I'ts really sad. Got in over her head in Calif. realistate market - it turned - and going south. I'm like a lotof other folks here; suck it up, deal with it and get on. There's nothing responsible about taking an interest only loan. You gambled and you lost. And ou are correct- lots of others will be in this same boat but it doesn't make it any less irresponsible just because others were doing it also. Like lots of other folks I spent the thirty years you keep mentioning living within my means, a modest home and am currently urging my kids to purchase a home within their means while the prices and interest reates are down. Get over it - move on.
  • Francine...

    Please don't let the hecklers here get ya down as they are at heart VULTURES circling what they consider to be roadkill...They also have a moral blind spot when it comes to Reagan and Bush 1 & 2 all three of whom pursued policies that have created the current business models...That have allowed the top 1% (like the guys who ran BOA and other financial institutions who set up these Ponzi like schemes that led to the housing and technology bubbles) to make a lot of money in the short run only to take their millions as they cut their losses and ran when the economy overheated and fell into a recession that cut the legs out from under people like us...

    BTW did you know that Bush II's Paternal and Maternal grandfathers were in the banking industry prior to WWII and helped the Nazi's get the financing they needed to build their war machine...I learned this by reading the book "The Rise of the Fourth Reich" written by Jim Marrs...

    BTW one of my first comments I made here is still in moderation...
  • Not your fault. I lost my home because of those companies. I got a lawyer and they told me not to pay until the issues were resolved. At the last minute, my lawyer told me she couldn't help me to get another lawyer. I did and by then my home wasn't mine anymore. I got a buyer for the home and would be able to pay the mortage off but they just didn't want to hear that.

    A few months passed, after losing my home and I got a call from the city telling me to resolve another issue with the home, I gave them the banks phone number.
  • It really pains me to read some of the cruel and heartless comments people have left in response to your heartfelt post.

    It's clear, at least to me, that you posted it with the hope of letting those "in power" know that this crisis is affecting EVERYONE! Perhaps some commenters have had the good fortune, or what they would call good judgement, to have been in their home since the last time interest rates were low. Fixed-rate mortgages were not so difficult to come by back then.

    Things changed after that. Mortgages were no longer help by the bank or mortgage company that originated them. Once the mortgage was approved and the funds disbursed, the mortgage "paper" was sold on the secondary market.

    The loan officers who, in reality, sold the mortgages to the homeowner earned their living on an incentive basis. Some were paid commissions and other were paid on the basis of how many mortgage loans they sold. Often, loan officers were paid higher bonuses for the less conventional loans, like variable rate mortgages. Because of that, some mortgage loan officers didn't even offer the option of a fixed-rate conventional loan as an option.

    This in no way imply that you, Francine, didn't know what your options were and what you were buying. Far from it. My point with this comment is that people in glass houses shouldn't throw stones.

    I'm sure not ALL is well in EVERY part of their lives. It's easy for people to call names on a blog comment because they think they know it all and there is no way for anyone to come back on them for their venomous comments. The harsher the venom, the more troubled and twisted the person is who is throwing stones at you.

    Forget them or pray for them. Whatever you do, never let them harm your warm and generous spirit, Francine! Of course that would never happen because, as I know you, your spirit is a very strong one too.

    Namaste
  • billtohara
    "That isn’t the issue, and I am amazed that so many people don’t understand what the issue is: it is injustice. It’s how the results of the last eight years have caught innocent people, not just speculators. Of course I won’t starve, of course I made a deal, and of course I know that."


    What injustice? You signed a contract you can not live up to. Economies move up and down. Assets appreciate and depreciate. It is foolishness of the highest order to assume property prices will never move down as well as up. Or that an economy will not contract. That bubbles will not happen. etc. etc.

    Have speculators done harm? Yes, of course. As have aging babyboomers tying up assets and pricing younger people out of markets. Is this unfortunate? Yes. Is it somehow unjust to those people now caught with their pants down? No. Frankly you sound like you had little concept of the cost and risk associated with the loans; risk that it is your responsibility to understand. Now you pay the price for not being suitable hedged and over-extending yourself.


    "You cannot dismiss me as a greedy speculator and tell me free markets should pertain here."


    I am not dismissing you as a greedy speculator. I'm dismissing you as someone who over-extended themselves and now has to readjust to your actual circumstances. Why shouldn't the free market be allowed to adjust?

    "I am not speaking for myself. I’m speaking for everyone who was taught that the American dream consisted of a house and a job, and who doesn’t have either right now through large global forces."

    That is hardly what the American dream consists of. What kind of entitlement problem do you have to think it does? Welcome to the real world. You are much better off than 99.9% of people on the planet, even without your house. You spent a large sum of money redecorating but don't seem to have had money put away to cover these ups and downs? Its shameful having been quite well off, and by the sounds of it you were, and not be able to ride this out.

    Like Anthony I'm a CA resident and a renter in a low-cost area. If I lose my job? I have 14 years worth of emergency savings at my current spending level and need not earn another penny in that time. That 14 years worth of living expenses? It wouldn't even cover the price of your house but I know which I'd rather have right now.

    "It is naive to think that if the banks don’t renegotiate mortgages the entire economy will recover by itself."

    Actually, it will. Will things get a lot worse? Oh yes. I expect the next wave of resets to do severe damage to morale and wipe out overextended people:

    http://www.irvinehousingblog.com/wp-content/upl...

    Will the economy survive and thrive after some time? Absolutely. Get a sense of perspective. Imagine the sacrifices made during the Second World War. Essentially all that is happening is that we've had a bubble that is unwinding. We're resetting asset prices to be in line with historical averages.

    Take a look at this:

    http://forum.globalhousepricecrash.com/index.ph...

    House prices are insanely out of line with wage levels. Instead of 5x we should be glad if they reset to 2 or 3x. Nevermind a 14% drop, I want a 50 or 60% drop.

    Injustice? Don't make me laugh.
  • san franciscanx
    The american dream is not a house and a job! It is opportunities to do whatever you want to do...you can be a drug dealer or a CEO. Whatever it is, the bottom line is to be ACCOUNTABLE.

    You had 50K money that you blew decorating the house. Did it occur to you to save it for a rainy day?
  • I don't mind being foreclosed on.I happen to practice non-attachment to material things, and I've long ago become detached from the house. That isn't the issue, and I am amazed that so many people don't understand what the issue is: it is injustice. It's how the results of the last eight years have caught innocent people, not just speculators. Of course I won't starve, of course I made a deal, and of course I know that.
    BUT: I did what you did for my entire life. I worked, lived responsibly, and I saved money. You cannot dismiss me as a greedy speculator and tell me free markets should pertain here.

    I am not speaking for myself. I'm speaking for everyone who was taught that the American dream consisted of a house and a job, and who doesn't have either right now through large global forces. It is naive to think that if the banks don't renegotiate mortgages the entire economy will recover by itself.
  • Silvio Gesell
    Exactly. how can you of all people possibly ask for assistance from a Bank? Your laughable public persona (if you want to call it that) is all about 'entrepreneurship', but when it doesn't work out for you, you suggest a cleverly worded form of socialism? If the State of Arizona is supporting your idiotic business classes, I hope they pull it immediately.

    How on earth can you ask for sympathy as the owner of a luxury $750,000 home? Are you crazy? Are you on Prozac?

    You'll be making deals alright... for government cheese and a nice spot in a government retirement facility. You're a waste of life. Please remove yourself from any relevant functions of my countries political system.
  • Anthony
    You took loans of $769k and gave the money to a 3rd party in return for an asset. Now you want to switch the price of that asset to be $659k and renegotiate the loan to be at 4.2%. You want the institution(s) you took the $769k from to eat the $110k loss.

    I think that is unreasonable. You should certainly feel free to try to renegotiate the interest rate - that is your prerogative. Of course it is the institutions right to refuse. If you default on the loan then they can seize the asset. Whether that makes sense or not is none of your concern; it's their right and you agreed to it when you signed the contracts.

    Why don't you go an ask the person you bought the asset from for your $110k handout? They should rightfully laugh at you. You signed the contract and made the deal. The loss is yours to eat.

    I know what property costs in California. I live in the SF Bay are and am just a renter because I could never justify the overinflated prices to purchase. I have family I wish I could spend more time with. I've worked hard, saved hard, and just like you my taxes are being sucked into this mess.
    Frankly, I feel I have karma to burn after so many years being fiscally and socially responsible.

    I fail to see why we should reward those that are in over their heads. That goes for both banks and for individuals. I have long been disenchanted with where my taxes are going. To give a sense of balance I send $1000 a month to various charities to those suffering from a lack of basic needs like access to drinkable water. For the rest of the spoilt people in this once great country, I say let you all fall down and be forced to pick yourselves up and rediscover what made this country great. Come join the real world.
  • san franciscan
    Am I the only one utterly shocked by the fact that this woman is supposed to be some sort of small business mentor?

    From the front page of their site: "Companies that are accepted into the Stealthmode Partners portfolio receive coaching, consulting, and connections to the people and resources they need to reach success."

    I really don't think this person is in a position to be handing out advice and counseling.
  • another american
    So when and where can i collect the mortgate for the house which i cannot afford?
  • Anthony
    Is it unfair that your bank got a handout and you didnt? Is that your argument?

    Now, I dont think it is right that the banks got bailed out. I am as equally passionate that what you are asking for is flat out dishonest and wrong. Further, your sentimental play and justification is simply a distraction from the facts, and quite frankly, pretty nauseating.

    I'm not throwing stones here, we've all been through rough times. But the creme rises to the top, and natural selection will take place. People who are unprepared are going to suffer the consequences of their decisions. Many will become renters, and in all honesty, that is probably what they should have been from the outset. Others are going to reap the benefits of being conservative, and not only living within their means, but also planning for a rainy day... guess what, it's raining.

    Remember, when it is time to perform, it is too late to prepare. Plain and simple, your lack of foresight put you here, that's all.

    YOU put YOURSELF in a bad situation, and no amount of eloquent writing or sob story of wanting to live near family is going to change that fact. Own up to your mistake and get to work and make it happen, or adjust your lifestyle to accommodate your new means.

    Please, dont spread the word that what you are asking for is only fair and reasonable, the comments of those who somehow agree with you have me really troubled at the direction this country is headed.
  • Eugueny Kontsevoy
    Hold on a second, are you implying that TARP money, i.e. the cash I had earned and paid in taxes, should be used to rescue "unhappy and frustrated" credit-loving consumers like yourself, who just happen to love his $750K Arizona (!) house so-o-o-o much that I'm supposed to feel sympathetic for you?

    Since apparently I am paying for this mess along with millions of other young working professionals, foreclosures is what we want. Yes, foreclosures and 3x reduction in real estate prices, because our economy doesn't pay salaries that let us save up $750K for a house in the middle of nowhere.

    Your "investment" should be up for sale for $350K and you should be rebuilding your credit while living in an apartment.

    And please leave banks out of it. They only gave you what you asked them for.
  • I'm really sorry about what happened... but words don't bring back things, they're meant to make you smile when you think you can't smile. You said that you're an optimistic person, and in my opinion I think you're a good person too.
    Hang in there francine! I wish you all the luck in the world!
  • I disagree
    "I’m not an idiot. I had a plan. It wasn’t foolish, and it wasn’t even risky. For almost four years I made all the payments easily."

    This defies logic - you made interest-only payments while everyone was getting drunk at the punchbowl. I am sorry, while I have no doubt that you are not an idiot, what you did was completely idiotic and therefore, since you are a grownup, you need to take responsibility for it.
  • Are you for real?
    Your defense of what you did is unconscionable!

    Taken a shot on a dream? Are you kidding? It makes no difference what a starter home costs in Calif. or anywhere else. You sense of entitlement is inexcusable and is symptomatic of why America is in the can.

    Bottom line: You went and bought something you couldn't afford. And yes, you are a bad businesswoman so cut the nonsense, would you advise a company, or invest in one that had no equity ownership stake in its business? You got burnt by being greedy; so sorry that your dream of cosmo's and finger sandwiches on the shore of Half Moon Bay didn't work out. Put a helmet on, go get a job, and quit looking for sympathy in cyberspace.
  • Hey there... Me again,

    I just read through some of the responses on this posting. My God.

    What I think some of these commenters fail to realize is, "there by the grace of God go I."

    People tend dislike people who appear to "have more" than they do, irregardless of how responsible you are/are not OR they are/are not.

    Sounds like you're a strong cookie by your sober responses to your critics. Hang in there. I'm pulling for you.

    LR
  • Francine -

    Thanks so much for this blog posting. It inspired me. I too have been fighting to keep my mortgage current. I was laid-off in September '08. Fortunately I was 2 months ahead on payments at that time and applied most of my severance towards an additional 3 mos. It's now 5 months later and I'm still unemployed and collecting unemployment. But I left a job that was paying close to 6 figures - the monthly unemployment amount will barely cover my mortgage, not to mention electricity, gas, food, etc.

    My credit is good and I have a pittance of savings left. But I'm certainly worried. And my mortgage company is treating me like just another number. (possibly because they've be inundated with calls/letters)

    Thank you so much for your courage to share your story. I hate to say that misery loves company, but your story really touched me.

    I also read one of your previous posts about pulling yourself up by the bootstraps. That's what really inspired me. I'd been considering becoming a consultant in my field of expertise - Email Marketing - but because, I don't know...fear, I have been hesitant. Your post made me realize that there is no better time than now.

    Again, sincerely, many thanks.
  • Sharon
    Thank you so much for writing this. I am going through a similar situation with two completely different mortgage lenders (Countrywide and Homecomings) and it just seems hopeless. I was proactive in the beginning when I knew troubles would soon come as my mortgage shop up an additional $400/a month and even as a rental home, the loss became unbearable after the first 6 months. As I held on to making on time payments and prayed the economy would get a bit better and the interest rate would drop, after over a year of waiting for that to happen put me in a financial bind that I haven't ever experience. I was just sitting in the dark so upset that my great credit has been ruined after I tried so hard to seek help in advance and customer service is no longer customer service. It would be so much smarter for these mortgage companies to give better assistance to those people trying to not be another statistic in the rising foreclosure numbers. Now I am waiting to see if my house will short sale or if I will just have to let it foreclose (which I am still trying so hard not to have this on my record). The only consolation I have is reading about people in a similar situation and speaking to friends and colleagues that are in the same unfortunate situation. Hang in there, I am and hopefully soon we will see a brighter day in this torn economy. Please keep us informed of the outcome.
  • I understand what you are going through...the situation is somewhat different but non less compelling. A few years ago I lost my job and as a result had to sell our home to our son and his wife so as to not lose it. After all we are all family, right. Well my son at the time was in the army and soon thereafter deployed to Iraq where he was wounded. His wife upon his return home divorced him leaving him in a financial bind. Being discharged from the Army and awaiting ratings for disability with no income to speak of. In order to keep our home my wife and I did the best to maintain the mortgage payments even though we too were still struggling. Currently the "ex" has us all in court trying to sell the home from under us to have her name removed from the mortgage. Ok, that part I get but we have not been able to find a lender to help...its reason after reason....Financially both or our situations have greatly improved and can certainly afford what we need to do but they cant get past the "past". I find it so hard to understand that banks, mortgage companies, even the VA for all their talk of helping vets and there families do nothing...its all "sound bites". I've gone a little long but its incredibly frustrating to see the hypocracy of helping companies that ran themselves into trouble but not the combat wounded veteran who ask nothing more than to start over.
  • Schadenfreude is the act of taking pleasure at another's misfortune. At its best, it's laughing at the guy who slips on the banana peel. At its worst, it is sitting ignorantly in your home with its fixed mortgage and low interest rate and laughing at anyone who bought a home in the last five years and is "upside down" in their mortgage today. You don't realize that misfortune COULD happen to you.

    This post, a continuation of yesterday's, is a series of questions aimed at those who told me I was a bad businesswoman, a fool, and unworthy of help because I bought an "expensive" vacation home in Half Moon Bay.

    1)Have you ever wanted to live near, but not with, your very close family? Mine lives in Half Moon Bay
    2)Have you ever been optimistic enough to think that for the next five to ten years, you will have an income similar to the one you have had for the last thirty?
    3)Have you ever taken a risk for a dream?
    4)Have you ever saved and invested over a ten year period, only to see it all evaporate in 90 days?
    5)Have you ever spent your days trying to help others succeed?
    6)And do you know what a starter home costs in California?

    Until you have had all those experiences, you have no right to pass judgment on me.

    I love my family and want to live near my grandchild and my daughters, who have left Arizona and tell me they never want to return.

    I could afford the house when I bought it, and with a long-standing business (the third I have created for myself) I thought I would be fine.

    I took a risk to move to California after 40 years of living in a place I did not enjoy, but stayed in to raise my children and tend to business

    I had enough money scheduled to come out of investments last fall to pay for the entire house outright.

    I have created jobs, helped others create jobs, been a foster parent, and helped send a young man in Uganda through college. And now I can't afford to go to his graduation.

    The home I bought is known as a starter home, a big step down from what I lived in while in Arizona. The $70,000 I made on my Arizona home was the down payment for the house in California. That's all gone now.

    I'm not an idiot. I had a plan. It wasn't foolish, and it wasn't even risky. For almost four years I made all the payments easily.

    What is wrong with you people? I hope nothing untoward ever befalls you; you will never be able to handle it.

    The spirit of America is of entrepreneurship. Entrepreneurship means the ability to take risk. If I didn't create jobs, you wouldn't have one. Period.

    If I am foreclosed, I am fine with it and ready to take the responsibility. I am strong and healthy. But if Citibank can run to the government with its hand out, and investment bankers who made more in a year than I made in my lifetime can fracture my mortgage into millions of pieces so I can't even call a banker and have a conversation about it, then I can at least ask.
  • I've already funded the bank's losses through my tax money.
  • They are automatically moderated. Don't worry, they are approved.
  • No. They were my investments:-)
  • KurtS
    "Suddenly, four deals I was in, all of them capable of making me financially secure, either fell out of escrow or went on 'hold.'"

    Just a brief question--were you selling these properties as the agent?
  • Anthony
    Why as my comment moderated? Can't we all have a discussion and present both sides of an argument? As a long time reader, I am very disappointed indeed.
  • Terri
    What makes me laugh is if your house had gone up 300,000 you wouldn't be sharing that with the bank. How does it make sense that you want the bank to share the losses with you and where does it end. If they refinance you, then they need to refinance everyone. Give me a break.

    There are 106,261,000 single family homes in the US. If they give you a break then they need to give everyone a break. Do the math! At 100,000 per home the number is 10,626,100,000,000. 10 Trillion, I don't think Obama has that up his sleeve.

    There is no guarantee of happiness in America, only the pursuit of happiness.

    Oh and if you are going to rewrite everyone's mortgage that is under water, how about all the people that paid for their houses but have lost money in the last few years? Should the government just write them a check for the decline in the value of their home.

    If you customers of your business all called and said they have problems now are you refunding their money?

    I don't get it! For the record, I bought my house 2.5 years ago, owe 350k and it is worth 275. I own a small business, which is a restaurant and I'm tightening my belt. I'm not looking for the government to fix it!
  • perl monk
    Ridiculous article. So you bought a house you knew you could not afford and now are asking for a handout.

    Sell it at a loss, stay somewhere you can afford and shut the hell up. This sense of entitlement is not funny anymore.

    See:
    If you plan to stay in the house until you die, the current value is not an issue. You should have thought before you bought it whether you will afford the mortgate and you made a bad financial investment.

    If you bought it as an investment.......tough luck.......sell it at a loss. Its like any other stock or mutual fund which you bought whose value has gone down. Or stick for a few years and its value may go up.

    Anyways..........at your age, if you make risky financial investments, dont ask for a handout at the community's expense!
  • Hmm, so you can't afford to make payments on a 3/4 of a million dollar house? How about this, sell it and move to cheaper house. I hate these crooked financial institutions more than anybody but I don't feel sorry for somebody who is over leveraged and living in a mansion. Suck it up and move.
  • Sorry, but no sympathy
    And here is why: "5-year interest-only mortgage"

    President Obama has spoken repeatedly about ushering in a new era of personal responsibility. There are plenty of us out there who dream of one day being able to purchase a home in a locale as lovely as Half Moon Bay, but whom recognized that we could not afford it if we were to do so with a traditional mortgage as opposed to the Monte Carlo, interest-only, devoid of all common sense, no equity model that you opted for.

    I feel awful about anyone losing their homes, but what you did is totally and completely irresponsible - you made your own bed, you sleep in it. Take some responsibility and grow up.

    P.S. As noted elsewhere - this is not the great Depression, not even close, when unemployment goes to 25%, then you can make the case.
  • themercedesman
    God Bless You!
    I think that your letter should be published in every Newspaper and on all the tv stations. You are very articulate and are not asking for anything unreasonable! Maybe if these lending institutions could actually look past the charts they make to figure P & L they would realize that helping you and countless others would actually add to the positive end of the bottom line!
  • I don't feel bad for you
    I am sorry but I feel no sorrow for you, here is the kicker:
    "5-year interest-only mortgage"

    what you did is totally, completely, and utterly irresponsible, and those of us who have paid down our house religiously are now paying for this kind of lunacy that people like you have brought upon us. an interest-only mortgage is akin to going to the casino, you made your bed, you sleep in it.
  • Eric
    Sounds to me like you bought a house you couldn't afford and want a handout. What about all of us to buy property we can definitely afford and live a bit more modestly? Should we get handouts too?
  • woodsmith59
    Francine Hardaway wrote: "I certainly agree. But then where is the payoff for being a businessperson and employing others for forty years? And where do I live when I get older?"
    ____________________

    Unfortunately that is the risk a business person takes if they don't pay into S.S. My own father was a DC who made about 250 grand a year and bragged that he paid in taxes every year what I made as an employee. He had planned on being a millionaire by the time he retired but stopped paying his Withholding Taxes in order to give that money to his ex third wife. When the IRS caught up with him he had to liquidate all of his savings and investments and after his death a short time later my Aunt was forced by the IRS to sell his practice which ended up failing.

    Nor did I receive an inheritance since it was all spent by my father's ex third wife and her boyfriend.

    My own mother did her level best to get her parents to move in with her when my Grandfathers health began to fail but my Grandmother wouldn't and insisted on putting my Grandfather in a nursing home. Later my mother was able to pull my Grandfather out of the nursing home and he died in her home. But only after my Grandmother and I walked in on an orderly who was slapping my Grandfather's face to get him to eat.

    When my Grandmother was forced to move in with my mother when her health began to fail and her home was sold. I advised (and my brothers agreed) that the money should (including our inheritance) be rolled over into her home and her mortgage paid off. As a result my mother is secure and her home could be sold later if needed to take care of her. If there is any money left my brothers and I will inherit then if not that's life and my mother will have been financially taken care of. As it isn't the Govt.'s job to fulfill the duty of ones children to take care of their parents in their old age.
  • Thanks for writing about your mortgage dilemma. It certainly is another sad commentary on how the current financial crisis is upsetting capable, hardworking individuals and negatively impacting their families and communities.

    Regards,
    DAR
  • woodsmith59
    Gregory...

    By allowing the lenders to tease people into homes they really couldn't afford with ARM's and Interest Only loans the Govt. is just as responsible for this recession as are the lenders...Had the lenders been forced by the Bush Admin. to refinance the mortgages going sour in the beginning and kept the owners in their homes this recession could have been stopped in its tracks...Only then would it have made sense for the Bush and now the Obama admin. to bailout those lenders in order to keep credit flowing...
  • You are a sweet person, and it makes me feel good to hear from you.
  • I certainly agree. But then where is the payoff for being a businessperson and employing others for forty years? And where do I live when I get older?
  • I expected to re-fi after I paid off the HELOC, which was supposed to happen from an investment property that was in escrow in San Diego when the bottom dropped out of the market. I knew exactly which investments would pay off the house, and everyone of them has been put on hold by this real estate downturn.
  • Because my business is in Arizona and I was unable to develop enough business in California to make the money to pay the mortgage. That takes time.
  • I'm sorry, but you have an incredible sense of entitlement that angers me to be honest.

    How would you look someone in the eye (like myself) who bought conservatively 7 years ago and has paid down my loan which is fixed at 5.5% and say that you deserve your loan to be reset and fixed at 4.2%? That's just ludicrous.

    And I don't want a handout down to that level because I know what it would cost the government. All money the government spends now has to be paid back at some point by taxpayers. But then again, those that are closer to retirement can just spend away knowing that they won't bear the burden that future generations will bear.

    There are no easy solutions to this, to be sure, but this would have far worse consequences than the level of foreclosures that we will see through this and next year.
  • nobodydidit
    I'm probably the last person you'd expect to, or want to hear from. A New York Street artist they call nobody. But I read your story, and would like to try to help, even as I too struggle to keep up with my mortgage payments. I have an idea, that may help.

    Anyway, contact me if you're interested. I maybe a nobody, but I really do care - TMNK
  • Bernard
    If these kinds of threats (by people who previously were not deadbeats) continue, you are going to make the property market worse. Traditionally, respectable people would struggle through to pay off the debt they incurred. If people like you not only walk away from the debts, but advertise it, then the number of foreclosures will increase, lenders will make lending-conditions tighter and the property market may never recover.

    You made a bad business decision, which since you are a businesswoman makes your fault in this even greater. It was lunacy to buy a house in the past 5 years. Presumably you made a large profit on your Arizona home? Are you going to offer to pay that money back to the lender who facilitated that profit accumulation?

    How is it that after being a businesswoman for 40 years you didn't have enough capital accrued to simply buy the house outright? Is it that you did have the capital, and decided to invest it elsewhere? And now you are trying to strong-arm your lenders to re-negotiate a contract?

    My partner works part-time, and I don't earn any income because of physical problems. 10 years ago we bought the only home we could afford. You spent almost as much renovating your house as we spent buying ours. We lived with the horrible 40-year-old kitchen for years, until we could afford to get the kitchen replaced.

    We watched as the prices around us rocketed in the past 10 years, but never did we fool ourselves that our house was really worth 10 times what we paid for it.

    I was predicting this crash since 2000, and I'm not a business man. In that year we looked at buying a separate property and walked away from it because the prices were rising so fast that they were obviously unsustainable.

    You haven't exhausted your money-making options. What's stopping you from taking in lodgers? In order to make ends meet, that's what my parents did when their kids left home, and it's what lawyer friends of mine have done since they've over-reached themselves. Or if that's too distasteful, move in with your daughter and rent your whole house. Or if that's too distasteful, rent a 1 bed apartment and rent your whole house.

    Or walk away from it, and accept you're a bad businesswoman.
  • Someone
    Francine,

    As a taxpayer and a renter I don't care about your personal drama and I don't believe that my taxes should be used to help keep you in a house that you can no longer afford. You keep saying that you aren't looking for a handout when in fact you are. Suck it up and foreclose. If the government bails out people like you who are in over their heads it will artificially inflate real estate prices and perpetuate the bubble. Foreclosure is the fastest way for the market to stabilize and for prices to once again reflect reality. If I recounted a long sob story similar to yours about my business, family, and neighbors, would it convince you to support a policy whereby the government helps pay my rent? Didn't think so. There are a lot of problems in the world today. Trying to keep you in an expensive house in Half Moon Bay isn't one of them.
  • You're karma is fine, Francine, and sometimes people sound like they're feeling smug when they are desparately trying to keep a postive attitude while ignoring the fact that their lives are really in shambles and getting worse.

    Sometimes a positive attitude is hard to keep, and sometimes even harder to show, but it's the only thing I can think of that will get us all through this until things finally do turn around ...and things WILL turn around!
  • Anthony
    I have to agree with Greg, I feel bad for you but as someone who fought tooth and nail to pay down my mortgage (ramen and extra blankets style) and now own my home, it pains me to think that a bank would actually renegotiate the value of the mortgage. You failed, time to move on. When it is time to perform, it is too late to prepare. Karma aside, where's my handout for sacrificing when the market was booming? Perhaps I need to go jump into debt too and ride this renegotiation wave? See how dangerous this is?
  • you lost my sympathy as soon as you said "interest only mortgage".

    how were you planning to pay off this (large) loan if you weren't paying any principal? refinance after you paid off the HELOC? or hoping that house prices would continue to rise?

    given your age, did you expect to pay off the house before you died?
  • Sprezzatura
    Just wondering -- why did you not move into the HMB house fulltime after you sold the AZ one? If you saw the clouds gathering and wanted to consolidate your expenses, maintaining one residence instead of 2 would seem to be the more logical choice.
  • I'm not sure I disagree with you about turning in the keys, but I'm not sure your reasoning is correct about this leading to the end of the private real estate market. One thing is sure; it is complicated.In my own circumstance, if my business had not declined, I'd be just happily paying no matter what the home was worth.
  • gregory smith
    Mortgage manipulation will not solve the problem. While I am in a similar situation (given, less severe my area is only down a few points) and empathize, I want to point out that what you are asking for is extremely dangerous. As soon as it becomes apparent that the government or courts will intervene to renegotiate the values of mortgages, money which the bank has already spent on your behalf, it will literally and irrevocably destroy the private real estate market nationwide. You are asking for the end of private financing for homes and the end of home ownership as we currently know it and the meaning of private property. This course will turn us ALL into renters or tenants in government housing. It is far better to turn in your keys, let the lending bank fail and let new leaner and stronger lenders come in, fill the gap and sell you back the same place for 1/2 the cost after you have done some credit repair.
  • woodsmith59
    Lucky for us we weren't roped into a subprime mortgage when we bought the home we currently live in today...I told my wife that I suspected a lot of people who did were told by their mortgage broker when questioned that they would be able to refinance which later turned out to be a lie...Sure enough I heard on the news back in January where the person who was losing their home related that was exactly what they were told...

    This recession began in the housing sector and has now spread throughout the entire economy which is why I can't understand why the Govt. absolutely refuses to help the homeowners who are in trouble instead of the fat cats who caused this with their seemingly infinite greed...
  • Francine, this was a very brave and reasonable post. I have commented on it at TBD.com: http://www.tbd.com/content/discussion/1300016

    Not everyone is reasonable. The Times had a story several months ago about a couple who wanted to sell a house which had declined to below its mortgage value, and they were outraged that the lender offered to split the loss 50/50 with them in a sale. I thought it was a reasonable compromise, not an outrage. Your suggestion is reasonable, and hopefully the lenders get a brain.
  • I have crossposted it to Huffpo!
  • Thanks, Ken. It is definitely all interconnected. I'm not looking for a handout, I'm looking for a fix to the economy. Barring that, I'm looking for a win-win for me and a bank. Of course I will never starve, because I have a family. But it's not about starvation, it's about ethics.
  • Tanya
    My husband, a process engineer in the electronics manufacturing field, was laid off twice in the last five years. In one instance, his department was outsourced to Singapore. In the other, his company closed the branch in our state offering no employment at other branches.

    During the first layoff, '03/'04, he worked as a handyman and I cleaned houses in order to be home when my two children returned from school. We ended up having to sell our house and move into the cheapest house in our city at 900 square feet, with (we later discovered) no insulation. We put 10% down and put a lot of sweat equity into the house thereafter. Despite everything, we remained grateful for the roof over our heads and the heads of our children.

    Then came layoff #2. By this time, our 401k was gone, our savings was gone and one uninsured hospital visit (my husband was having chest pains) cost us over $7,000. At this point, in order to hold onto the house, we refinanced from a conventional loan (which we'd always had throughout our 17-year marriage) to an interest only loan to get us through the layoff period. That was three years ago. Although my husband has since regained employment in his field, our home value has plummeted from $350,000 to only $200,000. People have left our neighborhood and abandoned their properties in the middle of the night. There are currently five empty bank-owned properties on our street, four of which have been empty for over a year.

    Our mortgage company will not allow us to refinance based on our current value, and our payment has increased because of the switch away from the interest only loan (after the three-year period.)

    We are an intelligent, hard-working middle class family (California is so expensive that an engineer's salary coupled with that of a part-time teacher equals middle-to-lower-middle class in our city) trying to hold onto a very small home which we have spent five years frugally fixing up. We do not use or even own a single credit card. We have one car. No big screen TV's, X-boxes, vacations -- just very simple lives.

    My husband is aghast as he watches corporate bailout after bailout and the frivolous indulgences that have come in the wake. Nobody bailed him out except his own sweat and muscle. It's simply appalling to watch fat cats grow fatter on our tax dollars, while the little guy busts his hump to no avail.
  • What was I thinking? I was thinking those were the loans being done in the community I wanted to live in. Almost every home in northern California has a HELOC as part of its first mortgage because the rates for jumbos were astronomical. I didn't get a HELOC to go to Europe or put in a pool:-) This house was the cheapest house in the community in which my daughter lives, too. And I am not asking for a handout, and I certainly hope you are less smug when something happens to you! I have owned my own business and lived within my means for 40 years. This house was within my means when I bought it. I didn't ask for my clients to go away. I am asking for either a renegotiation of my mortgage OR a rebirth of the economy.

    Your karma right now isn't too good:-)
  • I kept paying because I expected the economy to turn around and therefore to be able to keep paying and living there. I didn't want relief for myself; I wanted it for the entire economy so that I had a fair chance of fending for myself:-) When no one can afford to hire me I can't afford to keep paying, and so...
  • Oh, wow. you echo my sentiments.
  • charliereport
    We had a loan with Aurora also, but it finally foreclosed if you can call it that. They actually still own the home and have put the fair market value at almost $30,000.00 more than we owed on it. We tried very hard to sell it. Even at a short sale. We had one offer, but after two weeks they withdrew and somehow got their earnest money back too. We are glad to be out from under it, but going through the process was painful. Now we are just regular renters living in a different state.
  • morningaftershow
    thank you Francine, great post.
  • amysilverman
    Hey Francine -- Amy from New Times here. I just stumbled on this (you're the "haute" post on wordpress -- nice!) and wanted to thank you for writing it. I was just at lunch today talking with a friend about how not enough real stories are getting out about what's actually going on in the economy, on the "real person" scale and this one really hits it home, since I know you most certainly did not fall off the turnip truck.... The best of luck to you.
  • zenflow
    Beautiful writing and reasoning, Francine. It's never the irresponsible ones who suffer in these situations. I don't have a mortgage, but although I pay all my accounts "as agreed"—never a late or missed payment, over the minimums— my credit rating is falling because the banks are in a pickle of their own recipe. It's shameful and you are right to call them on it in a public forum.
  • 23eastblue
    Dear Francine,

    Stories like yours are precipitators of change! I think we need to deluge mortgage companies and the House and Senate with personal stories exactly like these. If I were you (if you haven't already) I'd forward this blog entry to Nancy Pelosi, to Larry Mantle and Patt Morrison of NPR, and to any other source I could think of.

    It really doesn't matter whether a person's house was $700,000 or $70,000, losing what we have all has the same impact on an individual.

    We, ourselves, have no home to lose since we were never able to purchase one after we moved to California to be with our adult children. (It's a choice we felt was important to make). We were waiting to be able to afford a home here, but on the week before President Obama's inauguation, my husband was laid off. My blog, therefore, is called "Our First 100 Days" and is meant to parallel President Obama's first days in office with our personal experience. It all feels a bit too Grapes-of-Wrath-like, but we have a trusty Toyota instead of a rusty truck to make it back East to the software jobs if we have too.

    Hopefully our blogs will reflect an eventual positive outcome so all of us can stay near our families and eventually enjoy enough security and happiness to others.

    Cheers - 23eastblue
  • I hope everything works out for you and everyone in your situation.
  • Even though I don't currently own a home, I understand that I'm in a similarly economic tight spot...I've just lost my second job in four months because of the Nervous Nellie, Chicken Little attitude of business owners. It's all inter-connected.

    You helped me when I asked, I'll help you if you ask me, and I hope that mortgage brokers, bankers, and others have similar can-do, all-American attitudes.

    Namaste
  • You are not alone. We are in talks with our Morgage company as well to try to resolve our current situation. Although they say they can help us it will take atleast 70 days to for them to get to our claim. Who knows what will happen by then. Hang in there.
  • Cranford Pundit
    This may help explain why the banks aren't doing much to fix the problem:

    http://cranfordpundit.wordpress.com/2009/02/05/...
  • asinusspinasmasticans
    Very simple, Ginger. They're holding the houses because they believe the government is going to buy them at top-dollar.

    Why not? Haven't we given them everything else they've asked for?
  • Well said.
    I am going to link to this in my latest blog article. It is a perfect example of how we can help ourselves out of this if they just let us.

    James Miller

    http://www.realestategozone.wordpress.com
  • Hi Francine
    Thank you for being so open, so honest, so transparent, and sharing yourself so wonderfully clearly. I will be extremely interested in hearing what the banks response is to this open, warm, well thought out, and clearly intelligent offer.
    I hesitate to think that it won't fit into their "system", and therefore cause you financial ruin..
    For now, I advise you to look at other options.. perhaps you can crowdsource a loan, or perhaps you can use something like zopa.com, but relevant for you in the US, to be able to find a large enough group of people who will lend you the money??

    I hope whatever happens, that you find a successful resolution of your issue.

    Kind regards
    Farhan
  • czar546
    well put.
    there is not answer. we suffer. we will continue to suffer. the fat cats will get us. no stimulus will correct this. giving people a check will make things worse.
    good luck with everything

    czar
  • Elvis
    Francie
    You and others in trouble need to check out www.livinglies.wordpress.com

    This guys blog is exploding it has great info about attacking the lenders and why your note/mortgage may have already been paid.
  • Great piece, Francine - thanks for sharing it.

    I think the fact that these companies won't negotiate until you're behind is absurd.

    I do think the taxpayer concern is legitimate - i.e. that taxpayers should not subsidize reductions in principal - but there's no reason on Earth they should not renegotiate terms with you BEFORE things get out of hand. It's just common sense - unfortunately it's not that common.

    Wishing for the best outcome for you.
  • My wife and I are paying a mortgage for a house worth less than what we paid for, only we haven't once thought about calling the bank to renegotiate.

    We agreed to the price of the home, and we signed on for a mortgage at that price. You did that same thing.

    I have recently been let go from the company that I was working for. I still don't consider it an option to try and change the terms of our mortgage. I agreed to those terms, just as you agreed to yours! Now, I voted for Obama, and I, too, disagree with how the government is doling out money to the banks, but two wrongs don't make a right.

    It is not the role of the government, or the banking industry, to provide handouts, discounts, or charities (although philosophically I understand the difference between charity and social services).

    Out of all of the people in this nation suffering under economic stress, I think for any given sum of money far more people can be helped in the inner cities than areas such as Half Moon Bay.

    And while I certainly hope for the best where your business is concerned - as well as your personal finances - I don't see why someone else should help you meet your obligation on your mortgage at no consequence (credit score) to yourself. What does that teach your grandchildren? That you can get in over your head and there's someone there to bail your out?
  • They were talking about this on KGO today. Sure, there were people that should not have gotten loans in the first place, but more people are losing their homes because of unemployment or underemployment than anything else.

    You are definitely not alone.
  • Thank you for your courage to share this, and giving so many of us the courage to also get things done in this area.
  • sitamnesty
    Ok, comments are moderated so here i go.
    Your text is a very interesting open letter.
    Do you want it to be efficient ? I guess so.
    There is a (may be) solution.
    In theory, it is a solution for everybody in your situation. Unfortunately, not everybody in your situation can write, and publish on internet, what you wrote.
    So here is the (may be) solution.
    You are educated and you know to read (=understand, not just deciphering), so i won't spend my time explaining you everything in detail because you can understand by example.
    Read this :
    http://tinyurl.com/cbbmq6
    FORGET ABOUT THE MEANING of the text.
    (It is about the situation in the Netherlands and Europe, you're not concerned, not yet.)
    Simply FOCUS on the second part of the text, the "Yes we can" part.
    Then just apply the METHOD to your letter and add that "Yes we can" second part, adapting it to your personnal situation.
    I'll be one of the very first who will participate if you ask to be helped that way.
  • Gracie
    Francine,

    You put so easily into words what I couldn't. I have called and called and called, and I have gotten the same response that I am not behind so they can't do anything for me. So let me get this right......when all of us scraping as much money as we can to pay every month, all stop paying, and they have another 6 million foreclosures from people who can't hold on anymore, will they realize the value of re-financing? The banks don't seem to be learning anything from our current situation. They get help, but refuse to help the people who they got the money from........tax payers.

    Please keep writing. You speak for so many of us.
    Blessings
  • woodsmith59
    Back in the early eighties and long before I bought my first home I realized just how foolish it was to take out a ARM on a house just by listening to the financial news reports of the time...I swore that I would never do the ARM thing and I haven't but even so I may end up losing my second home since my wife lost her job last Sept. and hasn't been able to find one since...

    If we end up losing this home I will never ever again enter into a 30 yr mortgage even if it means my wife going back home to her mother and I have to live in hotel room till the end of my days...

    Good Luck...I think that we will all need it before its all over with...
  • sitamnesty
    Just testing if comments are moderated or not. You can erase.
  • The first home in our neighborhood goes up for auction Sunday. The banks will be paid something because only people with the cash to burn will be bidding. The best offer is what the place will sell for, of course. The question today, is what will that selling price be when the Sunday auction closes.

    There have been cars driving through our quiet neighborhood all day today, driving slowly and looking lost - obviously looking for the house they might bid on come Sunday. The best outcome would be a good price from a bidder who plans to live in the home, but there are SO many successful real estate speculators in a college town.

    All the rest of us in the neighborhood can hope for is that the seller gets a good price!
  • 86andlex
    While your situation is unfortunate, I bought a five years ago. There was a house I wanted, but I could not afford it. I ended up buying a smaller house in a less than great neighborhood and certainly not by the water. I put 20% down and have paid my mortgage down to much below that with additional payments. Before you go asking for handouts, perhaps you should think about those of that have sacrificed to live within our means. What were you thinking putting 10% and then taking a HELOC out on top of that? As Karoli said, "man, this makes me angry".
  • Thank you so much for writing this. I was a small business owner in the arts, and doing well enough to have it be my full time employment so I could work from home and be able to fully care for my Autistic son. Then the economic downfall hit. And stores that carried my clothing line stop ordering or closed completely. My websales dropped to nothing, and art buyers and galleries stopped spending money on art and exhibits. Everything came to a screeching hault... except the bills.
    So now I'm back working a part time hourly wage job just trying to make ends meet, and still trying to operate what's left of my business (relying solely on the hope that things can't get any worse). BUT there's still my business loans and line of credit that needs to be paid every month- but without the previous sales that were coming in. The banks won't even talk to me about dropping the interest rate or working with me because I've paid it on time every month. It's just due at the first of the month- and that's that (never mind the fact that my family needs to eat, or my son needs therapy and medication, and we really would like to keep a roof over our head).

    My heart goes out to you. You're not alone. Keep your chin up and stay hopeful!
  • Terry
    Francine,

    I am in a similar situation and share your frustration. It is beyond me why financial institutions will not negotiate for a favorable outcome until you are behind on your mortgage. I've stopped paying my escrow as a strategy to indicate hardship and have retained a bankruptcy attorney. It's a great negotiating tool. As far as credit rating goes, I've stopped caring about that. I've a feeling credit rating won't matter much by the time this is done.

    Even if the bleeding stops tomorrow, this economy has changed forever the way people feel and think about finances. It has shaken their faith in whatever corrupt system we've had, and they'll be twice shy about investing in anything.

    On my way in to work this morning (and Lord only knows how long I'll have my job) this thought:

    My arms are strong.
    My heart is true.
    My vision, clear.
    There is nothing I cannot do.

    So, stand firm your ground. Stay in your home until they drag you kicking and screaming from it. We won't take it any more.
  • Jay
    "However, Obama got elected, and I kept on paying."

    I'm curious why Obama's election would inform your decision to stay in a mortgage you can not afford? Did you think that he held some magical power that was going to cure your problems? Did you expect him to pay your mortgage for you?

    I'm also curious which part of the "stimulus" plan you're expecting relief from? Is it the money for STD education and prevention? Perhaps it's the money set aside for the Mob Museum? No, wait...it couldn't be either one of those.

    I'm sure my comments sound harsh and heartless to you, but I am neither. I hope you can find some relief and that your lender will work with you to find a solution that will benefit both of you. I would encourage you, however not to wait around expecting a "stimulus" plan. The bill currently being debated will be of no help to you - or any other person in your situation.

    It's unfortunate but true that we live in an imperfect world where sometimes bad things happen. Bad things are happening now not because of any one person or group of people, but because of decades of horrific mismanagement and procrastination. The economic climate we find ourselves in currently has been on the horizon for years. It's time to pay the piper!

    Sell your house. Get whatever you can for it and live to fight another day. But, don't wait for Barak Obama to come to your rescue. He doesn't intend to!

    .....harsh....but, true!
  • foottothefire
    Why is it all American women at 65 look so fantastic...notwithstanding the problem
  • mdeuk
    This is a great post, Francine - your logical thinking and articulate communication make it easy to understand that your proposals for refinancing are obviously the best solution for all-concerned - you and the lenders.

    I hope that your letter strikes a chord with the right people and there is a sensible solution to your problem which lets you keep the home that you have worked so hard for.

    I'll keep my fingers crossed for you and other people around the world that are in a similar position.
  • This is a horrid situation for you.
    I know I'm young so I can't claim any personal experience, but a couple of my friends have parents in the same situation.

    It is a tough thing to deal with, and I wish you the best of luck.I hope everything works out, Francine.
  • Terry
    OMG! I feel so bad for you. You absolutely must be horrified. This is just not right. I hope you win your battle with the bank. I just don't see what the good is for the banks not to work with you. They can't see the house either in this market.
    If you want visit: www.WAHU4ME.com. Maybe we can offer you yet another avenue to create extra monthly income.
  • artandhistory
    It is so frustrating to watch banks continue to work against their own best interests - - as well as those of their customers. Thank you for stating the situation so clearly and honestly. It is painful to see so many elected officials attempting to score political points rather than work with Obama to craft solutions.
  • Francine, it is amazing that banks contiue to accrue properties foreclosed on rather than trying to work things out with customers who have good credit. Gone are the days when they could flip those foreclosed houses and make a quick profit, so why aren't they modifying terms? Best of luck dealing with them, it is an horrendous situation and needs to be resolved sooner rather than later.
  • Atta girl, Francine! You tell 'em.
  • Your blog is thought provoking.
    Here is my 2 cents [not an expert at all] about why banks are behaving like fools. They have sold your debt as securities to other investors and so on. Apparently, those multiple investors [hard to track, don't know why] can sue them if they change the terms now. Hence, we are suffering from the lose-lose solutions.
    My lesson: Free market works the best when real buyers /sellers are face to face not separated by multiple layers or derivatives.
    Good Luck and Namaste!
    Subhankar Ray
  • What an incredible story, Francine, and you most certainly are not the only one in the same boat. Many of my friends are experiencing the very same pain too.

    My Ex and I have a joint condo in South Beach and we're stuck with it for now, unable to sell in a declining market and unable to remortgage either. Thankfully, it is rented out at a small loss and we're hoping the market will have improved by the end of the year when the 5-arm finishes; some chance of that and the market price likely will have declined further.

    There are huge consequences bearing this burden though, since neither of us can move on and purchase property elsewhere. The annual stress of finding a new renter isn't fun either.

    I sincerely feel for you, you have my best wishes for an amicable solution with the banks.
  • Your comments have strengthened my resolve to get this settled.
  • It is actually great comfort to know I am not alone, because I can speak for all of us, since I have no shame and the writing skills. I am playing to my strengths and hoping it will help all of us.
  • Ian
    Brilliantly written. I feel for you my friend, because despite being on a different continent, I am in a similar situation here in the uk. The government props up the banks with our money and the banks foreclose and take our houses.

    Something has to fundamentally change, and soon. Best of luck.
  • Hi,
    I have two loans with Aurora, similar situations. I have heard that Aurora is pretty good about doing loan modifications. If you need someone to work with, I have two great folks I can recommend.

    good luck!

    LC
  • I'd like to thank your parents and teachers too. Bold and so well written that it's riveting. May they listen.
  • Agreed, Karoli. And thanks for baring your true experience in this post, Francine.

    I have to echo Karoli's sentiment that if the banks dare to do this and things go further south, that they will fail, and abominably. Why should they continue to strengthen themselves through our massive misfortunes?

    (They shouldn't.)
  • I think a reasonable form of bailout would have been to let people refinance their mortgages at the new current value of their home at their original interest rate.

    I think most people that bought homes in the last 5 years are in a similar boat. If you bought a property that lost 40% of it's value, even if you can make the payment, it seems almost silly to.

    The market will take more than 7 years to fully recover to your original value (at which time your credit will be repaired) and in the mean time you put yourself in a much better cash flow position by bailing on the property.

    What exactly are the banks doing with their bailout monies anyhow?
  • Like Karoli, this makes me madder than hell.

    we elected change and change is what we need.

    meantime, bankers are getting gazillion dollar bonuses and congress is sitting on homeowner help.

    this letter needs to go to every congressperson.

    rooting for you and for all of us "little guys"
  • It's cold comfort, but I think Congress is quibbling over the current stimulus proposal because they can. They have the time to play the media for whatever political gain they think it will get them.

    Call me sickly optimistic, but I expect they will pass something that will work and, this time, with TEETH!

    I'm glad you can write about it so well. I offer my thanks to your parents and teachers as well. Your talent is a service to many, so thanks go to you too.
  • Francine,

    I'm sure it's small consolation to know that you're not alone. Many of my colleagues, friends, & neighbors are in similar situations.

    Thank you for sharing such a personal account publicly. Hopefully, it will be strong voices like yours that bring this madness to an end.

    Warm regards,


    John
  • man, this makes me angry. You are asking for a reasonable resolution to a difficult situation, and the banks are simply refusing to deal with it.

    This has to stop. And stop now. While Citibank uses our taxpayer money to consolidate their position in the financial world (and BofA, too, bastards that they are), real people suffer.

    Enough greed. I hope they read it. I hope they take heed. Because they surely will fail if they lose the good will of their customers.
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