Here is how I learned that houses can't swim ... The house that I purchased in 2005, with over $30,000 in equity, all of sudden became worth $50,000 LESS than what I owed the bank in 2008. In three years the value of my home was "under water" by a little over $80,000! How could this be?
I drove through my neighborhood and saw an unusual amount of houses with foreclosure notices. But, I was in denial. I was so excited about the new job that I accepted and about relocating to another state where I always wanted to live, that I ignored the signs.
I quickly learned that it didn't matter what I believed my home was worth. Rather, it was all about how much buyers were willing to pay for the properties around my home that determined it's value. I was also frequently reminded that a property will not sell for more than it is valued, regardless of how much more is owed on the mortgage in a buyer's market with significant amount of homes for sale.
I even thought I would save money by doing a FSBO (For Sale By Owner) instead of turning the property over to a professional immediately. By the time I handed it over to a real estate professional, the market was sinking fast and it was too late. Not working with a real estate professional early ended up costing me more money.
I was so mad at myself because I knew better!
I JUST DIDN'T QUALIFY
Say what? A single mother, getting next to nothing in child support and the "sole bread winner" paying ALL of the bills alone, didn't qualify for a modification or short sale. How could this be? I felt hurt and confused. That's when the fear started to settle in. "Now, what am I going to do?" "How will I explain this to my son, my family, my boss?" "OMG ... foreclosures are public record," I remembered, "What if people see that my home was being foreclosed?" "How could I help other's with their financial situations while dealing with my own financial mess?"
Unfortunately, there was no Olivia Pope back then for me and Foreclosure Prevention organizations and programs didn't really exist until after the Foreclosure Prevention Act of 2008.
I felt so embarrassed that my financial dirty laundry was going to be exposed. And, as much as I wanted to be upset with the bank, I was more upset and disappointed with ME.
Dealing with this situation made me physically, mentally, emotionally and financially SICK and TIRED! My blood sugar and blood pressure was always elevated because of the stress of worrying, which was definitely not good for a diabetic with hypertension. I worried all of time about the fact that my house would not sell AT ALL. It stressed me out more because I was honestly trying to figure out how to minimize the loss to the bank. The stress was literally killing me. It wasn't that I was emotionally attached to the property. It was that I was emotionally attached to my FINANCIAL INTEGRITY! I had to fulfill my promise to pay back the money I had borrowed. And the fact that I had a willingness to pay but lacked the ability to pay the mortgage, ate me alive.
I had sleepless nights filled with crying. I prayed to God for guidance and consulted with my money mentor for advice. I had a great long-term financial relationship with my bank and it really felt like I was going through a heart wrenching, heart breaking, and bitter break up with them. I even started ignoring my bank's calls, letters and notices. It was that whole "blood from a turnip philosophy and somehow, I convinced myself that if I ignored them, I wouldn't be as stressed out. Of course, that financial fairy tale didn't (and still doesn't) work! The more I ignored them, the more intense they tried to reach out to me. As they should have!
I finally realized that if I continued to ignore and prolong the situation any further, I was going to suffer more mentally, emotionally, physically and financially. So, despite the negative social and financial consequences, I had let it go and walked away.
I am clear now as to why I had to go through this. I had to experience the negative consequences of my financial ignorance, bad financial decisions and bad timing. I had to experience and feel the pain. This experience helped me to become more compassionate to better help others going through this and similar financial issues. This test turned into my Testimony to share the lessons learned about some consequences and benefits of certain financial decisions, actions and non-actions.
I don't blame my bank for my foreclosure! I wasn't in an exotic mortgage and I was fully aware of the terms and agreements of the mortgage contract. Not all banks or credit unions were involved in the mortgage C-O-N-spiracy. Most financial institutions helped consumers obtain the American Dream to own their own home. I completely accept responsibility for my bad financial decisions and especially my financial ignorance.
- Click here for a summary of the Foreclosure Prevention Act of 2008. Know your rights!
- Operation HOPE also has a wonderful Foreclosure Prevention Program. Contact an office in your city or state.
- The Neighborhood Assistance Corporation of America (NACA) has a Home Save Program. Go to their website at www.NACA.com to locate an event in your city or state.
Also, most financial institutions have their own Financial Prevention programs or departments that may be able to assist you.
Whatever its worth, you are not alone and there is help. So please ask if you feel or think you might need help before it's too late. If you are on the verge or are now going through a foreclosure, make sure you have a Financial Resurrection Plan. Look out for my blog about the benefits of a Financial Resurrection Plan.
If you need more information about creating a Financial Resurrection Plan, feel free to contact me.