Please consider CnnMoney.com article:
After losing their homes, these 4 families thought they’d never recover. They’ve found it difficult to rent and their credit is wrecked, but life is looking up.
Stephanie Thomson
City: Chicago
Price paid: $245,000
Current value: 175,000
Lesson: “My only regret is that … we signed a contract and then we couldn’t fulfill that contract.”
Stephanie Thomson’s troubles began when her husband Rich, a highly regarded hair designer, became disabled with neuropathy and could no longer work.
The income loss made it impossible for the couple to sustain the payments on their home in a Chicago suburb.
When they bought the house, they took out a hybrid ARM mortgage. The original bill was $1,400 a month. But it went to $1,900 after three years and more than $2,000 after the second reset six months later.
“With my husband unable to work, we could have paid the mortgage without the ARM reset but nothing more,” says Stephanie, who tried for months to get help from her lender.
“They told me they would pray for me. That’s an exact quote,” she says.
The Thomsons decided to stop paying their mortgage last July — their first time missing a payment. They didn’t pay for 10 months, during which time www.YouWalkAway.com helped guide them through the foreclosure process.
In April, having saved what they would have paid in mortgage, they relocated to Elyria, Ohio, where Stephanie has relatives. Unfortunately, their credit scores had dropped so low that it was difficult to rent — much less buy — a new place. So Stephanie’s mom bought a house and rents it to them.
“It’s less expensive here; we were able to get a larger house in a wonderful neighborhood,” she says. “My only regret is that I’m a proud person. We signed a contract and then we couldn’t fulfill that contract because of my husband’s illness. It was very difficult.”
Marlene McGuire
City: Northglenn, Colo.
Price paid: $261,000
Current value: $180,000
Lesson: “You have to get out of the house when no one will help you.”
The McGuires purchased their home in 2005 and made the $1,500 a month payments faithfully. When their adjustable-rate loan began to reset, the increaseswere small, just $50 to $75 or so. But they added up, and soon the couple was paying more than $2,100 a month.That was a tough nut for Marlene’s husband, Bill, to manage even though he earns good money as a long-distance trucker. The tri-level had three bedrooms upstairs and another suite in the basement. “It had all the extras,” says Marlene, a homemaker in Northglenn, Colo.
Getting advice from YouWalkAway.com, a Web site that guides people through the foreclosure process, the McGuires realized that they owed much more than the property was worth and the upkeep costs were beyond what they could pay.
Even though Marlene loved her house, they opted for a short sale and found a buyer at $180,000. The lender approved the deal, and they moved out, free and clear. They continued making their regular payments each month until they left their house.
Because they were not delinquent, their credit didn’t suffer too much at first, but the short sale did hit hard.They now live in a mobile home.
“That’s the best we can do right now,” said Marlene. “But, the stress is over. My husband and I were not getting along; there was conflict. It was making me very sick. You have to get out of the house when no one will help you.”
My Thoughts
There are many others who make it through foreclosure and are very happy they made the decision to walk away. The time leading up to making the decision to walk away can be so extremely stressful that it can tear families apart. It’s time that we start thinking of house as something that is replaceable. A family isn’t. When a home or finances are starting to tear you apart, step back and decide… Is this house worth it?
Jon Maddux
CEO
YouWalkAway.com
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{ 2 comments… read them below or add one }
I haven’t started life after foreclosure as of yet, but my family and I are moving forward. After living in a house that was deeded to me (family home) in 1992, I refinanced it a few times, but this last time has been a nightmare. I had set up an online account with bill payer through my bank account and posted all the information that was asked off me. Unfortunately, I was still green to the computer world and did not know that I was to go in and repost the amount I wanted paid, especially when in red ink it had stated, “Payment processing will take 5 days”. To me that meant my account would be taking care of the situation in five days after posting the information. Of course, that is not what it meant. I was suppose to go back in after five days and repost the amount I wanted paid. I did not find this out for almost two months, like I said, I was green to the computer, and did not check by balance sheet everyday. We followed evey measure that was asked of us and still was denied any modification of any kind. This was due in part of a large debt ratio. We filed bankruptcy to stop the foreclosure in December of 2008. Our bankruptcy attorney said we could not file a 13, that we had to do Chapter 7. While in bankruptcy, I had faxed all the information to the mortgage company, but of course they could not do anything while we were in bankruptcy. They filed a relief of stay from bankruptcy, our attorney said that they wanted to work with us according to their motion, so we did not appeal to the courts to stop the motion. Time was of essence and by the time bankruptcy was finalized and the motion granted and sending by fax more information to the mortgage company (of which we found out later, they did not receive) our house was auctioned off and we have no choice, but to move out. We have been fighting for the last 5 months because we did everything we were asked of and because of technological difficulties (which I thought were suppose to make things easier to send) we lost a home that I, myself have lived in for approximately 41 years. I am totally devastated as well as my family (husband & 9 year old daughter). To lose this house over $2200 interest payment seems unjustified especially when I tried to show good faith and kept sending payments during this process (of course they sent it back). The $2200 turned into $5500 in December of 2008 and by March of 2009 the total to $9500. What more could we have done (moreso, what could I have done)? I am saddened by this loss not only for me, but for my daughter because this was an investment that got thrown out the window and now my credit is ruined of which I have worked for 30 years to keep good credit even when I had some difficulties. For anyone reading this, I just needed to get this off my chest and I keep hoping and praying that there is a way out of this even if it is all finalized through foreclosure. Boxes are getting deeper as I write this and now the move this next week. Pray for me and my family as I will pray for yours. Thanks for reading! Susan
I haven’t started life after foreclosure as of yet, but my family and I are moving forward. After living in a house that was deeded to me (family home) in 1992, I refinanced it a few times, but this last time has been a nightmare. I had set up an online account with bill payer through my bank account and posted all the information that was asked off me. Unfortunately, I was still green to the computer world and did not know that I was to go in and repost the amount I wanted paid, especially when in red ink it had stated, \Payment processing will take 5 days\. To me that meant my account would be taking care of the situation in five days after posting the information. Of course, that is not what it meant. I was suppose to go back in after five days and repost the amount I wanted paid. I did not find this out for almost two months, like I said, I was green to the computer, and did not check my balance sheet everyday. We followed evey measure that was asked of us and still was denied any modification of any kind. This was due in part of a large debt ratio. We filed bankruptcy to stop the foreclosure in December of 2008. Our bankruptcy attorney said we could not file a 13, that we had to do Chapter 7. While in bankruptcy, I had faxed all the information to the mortgage company, but of course they could not do anything while we were in bankruptcy. They filed a relief of stay from bankruptcy, our attorney said that they wanted to work with us according to their motion, so we did not appeal to the courts to stop the motion. Time was of essence and by the time bankruptcy was finalized and the motion granted and sending by fax more information to the mortgage company (of which we found out later, they did not receive) our house was auctioned off and we have no choice, but to move out. We have been fighting for the last 5 months because we did everything we were asked of and because of technological difficulties (which I thought were suppose to make things easier to send) we lost a home that I, myself have lived in for approximately 41 years. I am totally devastated as well as my family (husband & 9 year old daughter). To lose this house over $2200 interest payment seems unjustified especially when I tried to show good faith and kept sending payments during this process (of course they sent it back). The $2200 turned into $5500 in December of 2008 and by March of 2009 the total to $9500. What more could we have done (moreso, what could I have done)? I am saddened by this loss not only for me, but for my daughter because this was an investment that got thrown out the window and now my credit is ruined of which I have worked for 30 years to keep good credit even when I had some difficulties. For anyone reading this, I just needed to get this off my chest and I keep hoping and praying that there is a way out of this even if it is all finalized through foreclosure. Boxes are getting deeper as I write this and now the move this next week. Pray for me and my family as I will pray for yours. Thanks for reading! Susan