Wednesday, September 22, 2010

Taking Ownership.

We bought our house during the bubble. Had we waited another 6-9 months to buy we would have probably gotten this house for a song. That is, if we had wanted this house and if we had been able to get a loan with what we made. We got our loan approved back when they were handing them out like fliers. My point being, we bought during the bubble and while I hate the word "victim" we fell "that word" to the falsely inflated market because we thought it was what we had to do to be owners.

We both have wanted to be home owners our whole lives. When the rest of you as kids were probably nestled in your beds having your parents read you bedtime stories and making you cookies in the house you were raised in from birth or at least toddlerhood, my husband and I were probably packing up our things for the 18th time. I do not make that number up, both Brett and I moved about 30 times before we turned 30. Let's talk about how much stuff you have after you pack up that many times and move. Let me tell you, you become light. Those boxes of your art work from kindergarten and plaster imprints of your hands and class pictures? That stuff is the first to go. I tried to save those things. My ten year old moved 6 times before he was 8. Bella, 3 times in 4 years. That is if you don't count the 2 times I loaded a moving van by myself while I was pregnant with her. If you do, then 5 times. This house is the longest my kids have lived...anywhere. I lived in Wisconsin then moved to Iowa then back to Wisconsin then here to Utah. Once here, I moved from house to house within the school district so no one really knew how much I was moving unless we were good friends. Then you knew. You knew how I lived at friends houses and in neighbors basements and garages. In places we would sometimes have to pay for by giving away things. In order to try and stay in a house for just three extra months once, my grandmother gave a man the deed to some land she owned and could never convince anyone to develop. That land is now called Traverse Mountain.

Brett moved from state to state more than I did but he similarly lived in garages and basements and other people's houses and was essentially homeless. (I think I have him beat with the few months I had a cot in a potato cellar with a microwave as my headboard, so I woke up every morning to, *ding, smack*, but I wasn't there to see some of the basements he lived in.) So knowing the kind of pain and fear that comes with homelessness we wanted to buy a home as soon as possible to prevent this from being "us". I am sure for most people buying a home is about making a wise investment and having something that will gain equity over time to help to pad your retirement nest egg or whatever. For us, it was about our children never wondering where they were going to sleep that night and trying to do better for our kids than our parents had done for us and having something that no one could ever, ever take away from us. So you know how desperate I am when I say I am considering having someone take it away from us. We are looking at making a strategic default. LOOKING AT. Don't get all excited...

And don't judge me. If you bought at a time when the market was boasting a false price, you know how cheated you feel. And if you don't, I feel cheated. People that I will not ever get my hands on decided to pretend houses were worth a crazy amount and we were all forced to pay it if we wanted a house. We wanted a house like anything. Brett and I didn't leverage ourselves and buy a huge house on an ARM like people were telling us we could, we set a realistic budget and bought a normal sized piece of crap house that was pretty much the only thing we could find in our decided price range. Sure there were houses for less, but they were two bedroom 1,000 square foot houses in West Valley. Not that this is why we would ever default, just because we were bitter about losing equity. And not because our house payment could buy us a 400,000 house in today's market. Not even that.

When I came to look at this house the first time it had been listed for about a half an hour. I was in the car on my way south to look at another house and got the call to come see it. My agent said it would be gone in 24 hours. I drove down but we couldn't get in, the parents weren't home, so we just looked around the outside. Three guys in black BMWs pulled up and tried to muscle their way in past the children who were home alone. That made the renters and the owners mad, we found out later, mad enough not to want to sell to them. My agent and I watched these idiots for a while when unexpectedly the owner showed up with a handyman. She happened to park by me so I began talking to her. She liked me because I had lived down the street. I didn't tell her I have lived down every street in Utah County, I let her dream. Our realtor told me if we somehow won the bidding war that was sure to happen with the BMW guys there was a friend of his that would buy it from us sight unseen for 10 grand more than we bought it for. We said no. Am I kicking myself now? Sure. But our answer was that we wanted a house, the house we never got to have as kids, to give to our children. A place to live without someone throwing us out on a moments notice because A. They sold the house, or B. Because their cousin/sister/friend was getting married and they were giving the house to them to rent/buy/lease or C. They went through an awful divorce/financial period/bankruptcy and decided to quit paying your rent money to the bank or D. They wanted to start parking their car inside for the winter. We wanted to raise our family and grow old in a house for a change was our answer at the time.

Our agent knew a guy that did appraisals. A friend of his. This is a huge no-no if you were wondering. They pretty much sell you on the house as a team because one hand washes the other in this scenario. They told us certain things would be easy to fix, that our home owners insurance would cover a new 15,000 dollar heating system and that we didn't need a mold test. The house was being rented by hoarders so much of our home inspection reads, "Can not see (floor/walls/ceiling) to make full assessment." The renters told me of a toilet upstairs that broke and ran for an entire day and that the shower downstairs dripped badly for over a year. Every single door had been kicked in. It smelled and had muppett blue carpet EVERYWHERE. Were there huge red flags? Yes. But walking immediately into 70,000 in equity...how big could that red flag appear? Very small. Like a Barbie sized flag. And not even red. More like watermelon. And not even a flag. More like a scrap. Like a very little bit of watermelon Barbie yarn.

I worked on the house tirelessly in the beginning of our ownership. Then I slowed down. I thought it was because I was losing motivation to do it. I had energy one day and spent it tearing out carpet strips when I found the mold. We sealed up the downstairs. Then we tore the moldy drywall and paneling and base molding out and dealt with it ourselves to save 6 grand. And then it just sat, torn up. It's been like this for years. And I began to become successful in my job. And I began to continue to gain weight and sleep a lot and get sad and overwhelmed and in general my body began to act weird. And then I found out I had a rare disease. So we had some medical bills. Not too many but enough. We looked into Loan Modification and the company we gave our money to went out of business right after we paid them. We were very lucky that Steve Andrus has a lot of integrity because he worked his butt off and paid us back every red cent after a just few months time. We have had over 20 construction/handy men/contractor guys come look at the house. They all somehow stop returning our calls and just disappear. When I told that to the last construction guy, Jordan, he just laughed and said, "Are you scaring them away or something?" I said, "I think so, yes." He said, "You look tired. You look tired while talking about this." I am tired. I am just to the bones and soul tired. And so overwhelmed I wish I could explain what it feels like. I don't think you can imagine the stress and pain unless you have gone through something like this on your own for a few years. I am grateful for having a roof over our heads, I am. I am grateful for the people I work with that keep hiring me and are loyal and kind and fun and wise. I am grateful for having had such huge help with our kitchen and the miracle that that was. I am grateful to friends that offer advice and offer to help. It's just not possible to accomplish. I don't have a week anymore to have friends come over to help me. I work every day now so I won't begin something I can't finish. I don't have the physical energy either. I can't keep showing people what we need to do on our house over and over again. I can't keep living with it like this. I'm at rock bottom, folks.

As you go about your day, opening your doors without thinking about them, ask yourself what it would be like to have to yank repeatedly on that door to get it to open, dozens of times every day, every day for years. Or have it just one day fall off it's hinges. As you go about your day breathing in and out ask what it would be like to know your air quality is equal to living in the everglades. Or as you walk your deck stairs ask what it would be like to have to watch every single person that uses those stairs, every time they use them because there is a stair missing and the dog/neighbor's kid/your nephew almost fell through. This Thanksgiving when you sit with your family eating turkey and watching football on the couch imagine after cooking for two days you kiss your family goodbye, put on a coat and go out with a rented industrial paint sprayer and paint your entire house in order to take advantage of the free day you get renting equipment through Home Depot on a Holiday weekend. When you plug in your hair appliance/phone charger/laptop does it fall out of the outlet, two or three times during the course of you using it? Mine do. I just lost a ton of changes on this blog post alone after the laptop unplugged. Imagine crying for two hours while tearing out a bathroom floor after spending an entire day working on it, only to find you did it wrong and have to do it all over again. Imagine laying in bed wondering if your kids are breathing in gas from the pipe leaks. Imagine fighting and praying your way through a situation that was going to be so easily taken care of by a simple construction loan you could get with your 70,000 equity that no longer exists and never really did. Imagine working strenuous 17 hour days for weeks on end and finally coming home to a day off that is filled with the need for more physical labor. You fight that fight with your broken body for three years while being a wife and mother and holding a calling in your ward and throw in there a crazy mother and some mole removal then stir that all up in a pot with some loved ones fighting cancer and losing your dear Grandmother that raised you. After you do that, why don't you think of all of those things that I bet you take for granted day after day for being easy, that I have to deal with year after year, then you tell me if I am being immoral for considering a strategic default on an inflated loan on an arbitrary amount that was doled out under pretense by greedy succubi. You live in my shoes. In this house. Then you judge.

11 comments:

Anonymous said...

I'm sooooo sorry to hear about all the problems with the house; that's a long hard road. We had some problems with ours sinking into the ground, but we got that fixed (after $60k and a three year law suit).

I guess you just weigh the pros/cons of defaulting, make a decision and move on with your life. If someone doesn't like your decision then too bad, they aren't you.

-Sterling

"Lucky" said...

(hug)

Friends of ours strategically defaulted on their huge, brand-new, swimming pool, 5 bed 3 bath, inflatted home in AZ three years ago. Now that the three years are up, they are back in the market to shop wisely for their next home.

No judging here. I've seen it work for people. You're much stronger than I and I applaud you for sharing your story.

(hug)

AzĂșcar said...

Who would judge that? WHO?

Stay, walk away, I'll be there no matter what.

The Bakers said...

No judging. Only applause. Going through a loan mod right now through the mortgage company itself....dragging my credit through the mud. Not nearly the problems inside, but definitely got the hose when we purchased. sometimes you just gotta Do what you just gotta do...props to ya.

Kateastrophe said...
This comment has been removed by the author.
Jewels said...

You are quite easily the strongest woman I know. You know what's up, you know what's best, and you know what you can take. NO ONE can tell you what's right for your family but YOU. Make the decision and whatever it is? It will be the right one.

Nana said...

Your post on moles made me laugh. This post makes me so sad. I wish there was something more than platitudes that I could offer you, Amelia. Can I offer to do something. I live in an old house as well. My plugs also come out at the drop of a hat. I am having to sand all the floors on my hands and knews. My 12 year old daughter is in her parents room while I try to do the 'room makeover' that she has dreamed of happen. I know none of that helps you. Life is hard. It really really sucks sometimes. I often wonder why my life path seems strewn with so many pebbles and rocks. I read your blog and re-realize that probably everybodies path is similarly strewn.
If I can help, I will. I will applaud you in whatever decision you make, knowing that it will be made thoughtfully and without guile.
Heres to our rocky strewn path. It is still good to be alive.

Amelia Merritt said...

Thanks Brenda! That comment made me cry. Indeed, here's to the rocky strewn path!

Andrei Soroker said...

Amelia,

I feel your pain (http://soroker.blogspot.com/2009/06/i-owe-twice-market-value-of-my-home-to.html).

I was going to suggest defaulting on the second loan only (that's what I'm doing), if you have two mortgages, but Utah has no laws shielding homeowners from deficiency judgments on purchase-money loans.

Walking away from an underwater mortgage is the right thing to do, unless you have reasons to believe your house will regain equity sometime soon.

If you stop paying, stop payments on both loans. Make it your goal to stay in the house as long as possible before foreclosure -- save money and make sure your lenders can't get a hold of it.

A default will ruin your credit, if you're on the loan. This is very scary, but you have to ask yourself whether your credit is worth more than food for your children. I asked myself this question and picked food.

Anyone who uses ethics in arguments against strategic defaults is simply wrong.

If you bought a house in 2006-7 and are still paying for the original notes -- you are a hero. You've survived a terrible shipwreck, and now you're on a raft in the middle on a stormy ocean. Unfortunately, no one with power to help will help you. The banks are predators and the government is too slow to pass meaningful legislation.

A strategic default is a very serious weapon -- it's the only thing that scares the banks. The more people go for it, the higher the chances the banks will do the only thing that will minimize their losses: proactively cut principal balances.

Good luck,
Andrei

Brett Merritt said...

First, I'm so glad we have places like blogs to express ourselves at the highs and lows of our lives. I love Amelia for her ability to express herself in writing and I love that she has so many great people who care about her.

Second, for me at least, this is more about being mislead when we bought and then refused when we tried to be responsible and refinance or modify our loan. Lenders have a tendency to look at everything on paper say, "You don't deserve help." Well, we did/do.

Third, we both work 9-14 hours a day. Me, every weekday and her at least 3 days a week. Sometimes 6. We got to a point where our projects couldn't be tackled casually in a few Saturdays, at least from our level of experience.

Now, Amelia is the hardest working person I know. We thought we'd get a fixer-upper that we could both work on. And at first we did get a lot done. (My specialty was showers and toilets.) But when the bigger problems started rearing their heads, I tapped out. She didn't and she kept pushing herself to conquer them. But we can only get to a certain point where time, money and expertise are in conflict with each other preventing further work.

So here we are. We appreciate the outpouring of love and offers to help. It really helps me realize how much people around here do their best to look out for one another. The thing I want everyone to know is that what she and I have built together (literally and metaphorically) is 1000 times better than any of the garages, apartments, and rent-to-owns-we-never-owned that I had to endure getting to this point. We both now have a home. We've never been able to say that. And much of the frustration comes from being soooooo close to living the dream we've always had: normality.

Jennifer Russell said...

GOOB, out of comunicado (that's how ID smoke jumpers say...out of communication my phone is off till FRI) anywhooo, just sent you an email, What's up for Christmas? You do have my ornaments, maybe its fortuitious...anyways check your email...and get back to moi...Hilo and I found a ride to UT...Love, GOob