A series of disasters can tilt any family into foreclosure

February 16, 2011 

Have you noticed the front page of The Olympian's classified section recently? Some days it's full of legal notices announcing homes being sold at foreclosure.

About one of every 700 homes in Washington is in foreclosure. Nationally, it’s one out of every 500. Each one represents a family uprooted, financial distress, ruined credit.

I know: My home is one of them.

For the past 20 years, my partner and I have been homeowners. But then a series of disasters – natural and otherwise – happened in such quick succession that our financial reserves were completely wiped out.

Twice in three years, Ken Lake overflowed its banks, something it had never done before. Twice it ruined an entire level of our house, which we had just renovated. Twice we rebuilt all the bedrooms, two bathrooms, a playroom. We qualified for FEMA assistance, but that barely covered the materials.

And then I lost most of my income. In this economy, a computer consultant like me becomes very expendable. My partner’s income could support us, but it couldn’t support the house.

We did everything they tell you to do. We explained things to our mortgage company and asked for a loan modification. They lost the paperwork. We filed again. They lost the paperwork again. This went on for over a year.

We sold treasured possessions, borrowed money from a relative. I haunted job boards and took on any short-term work I could find.

We slipped one month, then two months behind on the mortgage. The mortgage company has 90 days to decide to give you a modification. The one time they didn’t lose the paperwork, they told us the financial information was too old after 85 days, and required that we resubmit it.

They refused to take partial payment. When we fell three months behind, we begged and begged until they agreed to set aside that policy and take two months’ payment.

Then they held the check for two weeks, which put us four months behind. This gave them the chance to play their trump card: They returned the check to us, said we were four months behind – and that we were now in foreclosure.

I don’t blame the mortgage company for our financial situation. And I don’t expect or want the government to bail us out.

But I believed, I really did, that any living, breathing person at the mortgage company who heard our story would actually inject some compassion into the situation. Naive, I know.

I pictured Jimmy Stewart giving Ellen Corby his own honeymoon money to tide her over until the bank re-opened in “It’s a Wonderful Life.” I remembered walking into my own bank not that long ago and being greeted by name.

There wasn’t any advantage to the mortgage company if they modified our loan. Because of deals with the federal government, they make more money foreclosing on us than modifying our loan.

We’ve let our financial institutions grow into monsters we cannot control. We trust them with our money, with our security, and they put us on hold.

Over half the people in the United States who face foreclosure cite loss of income – or no income at all – as the reason they fell behind in their payments.

There was a time in recent memory when people entered foreclosure because they had speculated in the real estate market. That is not what is happening now. These aren’t luxury homes, or second homes, or houses being “flipped.” These are homes with swing sets in the backyard, a pile of sneakers inside the front door.

This is my home. This is your neighbor’s home. And, given the right confluence of disasters, it could be your home.

It doesn’t matter that you have always had good credit. It doesn’t matter if you are an upstanding citizen, an excellent employee, a good neighbor, an asset to your community, or kind to animals.

What matters is that the cash flows – away.

Chris Madsen, a software developer and writer who moved to Olympia six years ago from Maine, is a member of The Olympian’s Board of Contributors. She can be reached at cetmadsen@gmail.com.

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