An Open Letter to my Two Mortgage Companies

by francine Hardaway 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.

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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{ 48 comments… read them below or add one }

Karoli February 6, 2009 at 6:30 pm

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.

John February 6, 2009 at 7:02 pm


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,


Web Pixie February 6, 2009 at 7:08 pm

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.

B.L. Ochman February 6, 2009 at 7:17 pm

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”

Derek Neighbors February 6, 2009 at 7:19 pm

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?

lildb February 6, 2009 at 7:19 pm

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.)

Ben Watson February 6, 2009 at 7:37 pm

I’d like to thank your parents and teachers too. Bold and so well written that it’s riveting. May they listen.

Linda Costello February 6, 2009 at 7:49 pm

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!


Ian February 6, 2009 at 8:47 pm

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.

francinehardaway February 6, 2009 at 9:01 pm

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.

francinehardaway February 6, 2009 at 9:09 pm

Your comments have strengthened my resolve to get this settled.

Sally February 6, 2009 at 9:33 pm

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.

Subhankar Ray February 6, 2009 at 9:37 pm

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

Ted Gilchrist February 6, 2009 at 9:41 pm

Atta girl, Francine! You tell ’em.

Ginger Kenney February 6, 2009 at 9:47 pm

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.

artandhistory February 6, 2009 at 11:14 pm

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.

Terry February 6, 2009 at 11:16 pm

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: Maybe we can offer you yet another avenue to create extra monthly income.

suliat February 6, 2009 at 11:18 pm

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.

mdeuk February 6, 2009 at 11:27 pm

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.

foottothefire February 6, 2009 at 11:27 pm

Why is it all American women at 65 look so fantastic…notwithstanding the problem

Jay February 6, 2009 at 11:35 pm

“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!

Terry February 6, 2009 at 11:36 pm


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.

Kristen Ferrell February 6, 2009 at 11:46 pm

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!

86andlex February 6, 2009 at 11:52 pm

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”.

Web Pixie February 6, 2009 at 11:53 pm

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!

sitamnesty February 6, 2009 at 11:54 pm

Just testing if comments are moderated or not. You can erase.

woodsmith59 February 7, 2009 at 12:01 am

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…

Gracie February 7, 2009 at 12:04 am


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…… payers.

Please keep writing. You speak for so many of us.

sitamnesty February 7, 2009 at 12:09 am

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 :
(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.

Maria Keckler February 7, 2009 at 12:13 am

Thank you for your courage to share this, and giving so many of us the courage to also get things done in this area.

Kelley Eling February 7, 2009 at 12:17 am

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.

Matt February 7, 2009 at 12:17 am

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?

Anthony February 7, 2009 at 12:22 am

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.

Elvis February 7, 2009 at 12:22 am

You and others in trouble need to check out

This guys blog is exploding it has great info about attacking the lenders and why your note/mortgage may have already been paid.

czar546 February 7, 2009 at 12:24 am

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


Farhan Rehman February 7, 2009 at 12:25 am

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, 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

wildpen February 7, 2009 at 12:25 am

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

asinusspinasmasticans February 7, 2009 at 12:35 am

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?

Cranford Pundit February 7, 2009 at 12:37 am
Rod Carroll February 7, 2009 at 12:40 am

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.

Ken Oatman February 7, 2009 at 12:43 am

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.


Melissa Blue February 7, 2009 at 12:44 am

I hope everything works out for you and everyone in your situation.

23eastblue February 7, 2009 at 12:46 am

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

zenflow February 7, 2009 at 12:48 am

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.

amysilverman February 7, 2009 at 12:55 am

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.

morningaftershow February 7, 2009 at 12:59 am

thank you Francine, great post.

charliereport February 7, 2009 at 1:00 am

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.

francinehardaway February 7, 2009 at 1:07 am

Oh, wow. you echo my sentiments.

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