A personal account of going through the foreclosure process
TANGLETOWN — We’ve celebrated Thanksgiving in our home for the past 12 years. When we bought it, it was in pretty sad shape, but it had good bones and plenty of room for the 20-plus family members who gathered to give thanks and stuff themselves with the traditional turkey dinner.
Each Thanksgiving since 1998, the house has improved in looks and function. We’ve replaced the crumbling chimneys and the tattered roof with a neighborhood improvement grant and took out a second mortgage to pay for re-plastering the walls and restoring three levels of wood floors.
My husband and our new neighbor removed two tons (validated by the scale at the city dump) of debris and overgrowth from the back yard. Slowly, the house was restored to its former glory. It isn’t the fanciest place in Tangletown by any means, but it is a home we’ve worked very hard on, and we are proud of it.
We bought our home in 1998 for $199,000 — at the time, most of the houses in the area then we’re going for $300,000–$500,000. The house was in significant stages of disrepair, so while we got a good deal on the house, we inherited more work than we in our naive optimism realized.
Every surface of the 3,000-square-foot house had to be repainted, refloored, re-windowed. The house has three stories, two fireplaces, five bedrooms and three full bathrooms. We tapped every possible resource we could think of to resurrect the house, which had been a beauty when it was built by a landscape architect in 1923. And every year during the beginning of the holiday season, we gave thanks for the health of our family and the slow, steady renovation of our home.
Recently our home was sold in a sheriff’s sale. Like the other 30,000 Minnesota families facing foreclosure this year, we can’t believe this is happening to us. We’ve been hard workers all of our lives, and we’ve paid our bills. But a heart attack and long-term unemployment and underemployment quickly took a toll on our finances. And the banks and mortgage company we’d done business with for years were friends during the good times and foes during the bad.
It doesn’t seem right that they pushed second mortgages and high interest credit cards until 2008, but since then have been reluctant to help their customers find solutions to the financial shortfalls that have affected so many of us. Perhaps one of the highest costs of this recession is the disillusionment of middle-class people who believed that if they worked hard, they would be rewarded.
Although it’s likely too late for us, now that the distractions of the elections are over, we hope that our policy makers will find real solutions to this foreclosure epidemic, which is blighting neighborhoods and decreasing our public coffers, due to the accompanying loss of property tax income.
In 2008, it was time to downsize
When our son graduated from high school in 2006, we decided to downsize our life and move to a condo downtown. After two years of upgrading our home for sale and making a down payment on the condo, we put our house up for sale during what turned out to be the worst real estate market since the early 1980s. Unfortunately, prospective buyers didn’t care about our heroic efforts to preserve our house. They were looking for one of two things: home prices substantially less than the wildly fluctuating market rate, or perfection in the form of an old house that had been virtually gutted and now boasted low maintenance and old-world charm.
My husband quit his job to get the house ready, and he had a mild heart attack shortly after our first open house. He claims that the physical, mental and emotional demands of preparing the house took a toll on him, and I don’t doubt it. Since May of 2008, he hasn’t been able to get back to his previous employment level as a grocery store or nonprofit manager. He’s working at half of his experience level, so for the past three years we’ve lost a third of our income and the health insurance his former job provided.
Trying to save the house
In 2009, after it became clear that the house was not going to sell at a level that would allow us to move into the condo we had reserved, we took our house off the market and tried to keep paying our mortgage by drawing on our retirement income. But half of what we withdrew went to taxes, due to early withdrawal penalties. That wasn’t sustainable. So after long and painful consideration, we’ve decided to let the house go into foreclosure.
In addition to the challenges of paying bills with less income, our property taxes went up 40 percent from 2008 to 2009, due in part from putting the house on the market for a sale price that warranted a higher tax level.
Unlike the many foreclosure scenarios portrayed in the media, we haven’t chosen to quit paying our mortgage because our house is underwater. Like most Americans going through foreclosure, we quit paying our mortgage because we can no longer afford our home. Given our significant drop in income, we can’t sustain the mortgage, upkeep on a large old house, winter fuel costs and rising property taxes.
According to the Mortgage Bankers Association, one-tenth of Americans are behind on their mortgages; unemployment hovers around 10 percent as well. Given the scope of this problem, a structural solution is in order, but mortgage companies are unlikely to offer solutions to home owners without a strong incentive from the federal government.
The sheriff’s sale of our home was Nov. 24. Bids for the house came in from dispassionate real estate investors who have the financial cushion to profit from others’ misery. We only hope that ultimately our home will go to a large family who will enjoy its five bedrooms and three bathrooms and will continue to carry on the tradition of restoring the home to its former grandeur.
Since we had planned to sell our home, our foreclosure probably is not as heart-wrenching as those where families expected to grow old in their homes. Still, we do experience sharp pangs of sadness while tending the rose garden we planted in memory of our grandparents and planning the menu for our last Thanksgiving.
Unless a miracle occurs, this will be our last Thanksgiving in our home, something we’ve anticipated since 2007. A dear friend who lived with us for a few months last year after she lost her home in Linden Hills, gave us good counsel: “Don’t fight the foreclosure mentally or physically, enjoy every day in your home that you have left. Remember the good times. Take lots of photos and videos. The memories you make in your home will last a lifetime.”
We are trying to take her advice, but some days it takes more fortitude than we can muster.
Lynn Ingrid Nelson and her family have lived in Southwest for the past 22 years. She can be reached at [email protected]
Tips for home owners whose properties are worth less than they can sell them for
• Be wary of Realtors who specialize in short sales and say they want to help you; carefully check their references and experience levels.
• Consider working with a low-commission realty alternative like Webdigs.
• Check out the Minnesota Home Ownership Center, a nonprofit which offers counseling, information sessions and great online resources.
• Get a referral for an attorney who has expertise in bankruptcy and other debt management strategies. For a small initial fee, you can review your options.
• If you need help with monthly budgeting strategies during these hard times, Lutheran Social Services has good financial management counseling services.
• Don’t try to figure things out alone, and don’t wait to ask for help. Financial problems tend to multiply quickly.
• Find resources to manage your anxiety; you may benefit from the support provided by group or individual therapy.