On Real Estate MSN there's an article: The 6 Phases of Foreclosure -- which should not be confused with the 7 Stages of Grieving, although I'm sure any family going through foreclosure is in grief.
Personally, I have problems with articles that omit the human factor. There's a family, or a single homeowner, or SOMEONE living in that house. Oh, it's "Just a Phase"
Yeah . . . right!
Do you ever wonder how a society can become DESENSITIZED?!? Do anyone even care?!?
In this article, the steps are outline quite nicely. And yet . . . in my head I can hear the sad cadence of the death drum beating down to the final day when they come to kick you out.
Did the brilliant journalist Jean "Good to the Last Drop" Folger realize that with each FORECLOSURE there's a FAMILY living in that house that will now be displaced.
Ah, who cares . . . right? It's the homeonwers fault . . . they bought more then they could afford . . . they used their home as an ATM. Or, so they say.
I don't like this article, not because of the steps . . . which are perfunctory, but that's a person and/or family, living in that house, and there is not one ounce of human compassion for whoever owned that home. Go ahead and become SO desensitized that you don't even REALIZE that a family might be living there. Ever wonder how a society can GET desensitized?!? Reading crap like this, and thinking it's a brilliant piece of journalism.
So anyway, here are The (other) 6 Phases of Foreclosure:
Phase 1 -- Friday was the layoff. The company just couldn't keep her on. After 12 years of employment, the company lost one of their biggest clients. 35% of the company's income was gone now with the loss of that client. And so, the owner had to lay off. They had no other choice. The severance package would hold her for awhile. Savings for the other while. She'd be okay. Of course, it's a pain to find another job now. But, she's employable . . . surely 12 years of being a dedicated employee would amount to something.
Phase 2 -- Resumes go out . . . 20 a day. Trips to the employment office to file for unemployment, Everything is online now. She tried to follow-up but there's no contact numbers. Kids are starting school next week, trips to buy supplies, and counting every penny. WOW -- food really has gone up. She just hadn't noticed. Onions are now $1.29/lb? When did that happen?
Phase 3 -- Bills come in, as always. This month is okay. Next month is too. Unemployment helps. Resumes are still going out. GREAT!! An interview. The office lobby reminds her that she's not the only one vying for the position. Don't act nervous . . . don't act needy. Confidence.
Phase 4 -- It's been 5 months now. That went fast. The bills come in as always. This month was tough. Expensive and unexpected car repairs, her son got sick. She's paying on COBRA to keep medical coverage. Everything is adding up now. She's got to make some cuts to the budget. The temp job is fine, but 40 hours at $10/hour just doesn't seem to match the salary she was earning just a few months ago. With the mortgage of $1,450 she's still able make it. Hard to schedule interviews, work the temp gig, manage the household. She doesn't want to ask her parents for help. Maybe she'll have to. Doesn't seem right . . . she's been taking care of things on her own for so many years.
Phase 5 -- The energy is totally drained now. She tried to get her mortgage modified through HAMP. Very confusing. She was told to make a trial payment. She did. Waiting for final modification to come through any day now. Bills come in, as always. Noticies from the bank don't make sense. She was paying the mortgage, the payments were sent per the trial period. What's this default notice? The temp job ended. Time to file for unemployment again. Savings are finite now. Kids just don't quite get what's going on. She's stressed. It's becoming very hard to focus on the mundane tasks now. What's a trustee sale?
Phase 6 -- It's been 10 months now. The loan modification was declined. The bank's notices are over $7,500, there's late charges and interest due. The house is up for sale now. It's a short sale. Values have declined in her area by over 30%. Refinancing wasn't an option with her lack of employment, decline in property values. She tried. She looks around at her home. She bought it 5 years ago. She was secure with employment, could afford her payments. The holidays she enjoyed. Her son's 10th birthday party in the backyard was fun. She had a life in that house. So did her kids. They love their buddies, and the schools are good ones. That's why she bought her home. Now . . . she's sorry she bought $250 in paint, bought the furniture and tried to do the Pottery Barn thing. She should have just saved more. Her sleepless night cause her mind to race. During the day she's very tired. She's sorry she tried to make her house a home for her, and her kids. She blames herself for not staying in her apartment. The additional $500, or so, a month in her housing budget made sense 5 years ago. Maybe the short sale will work. She thought she was buying the American Dream.
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Did Jenna know this post was coming? I do not understand. I enjoyed reading it, and today (of all days) I've had a few dismal short sale situations that remind me that the AMerican Dream can sometimes turn into a nightmare.
Carla, Excellent post and hoping it getting featured. But, I can't say I enjoyed reading it........saddest and most accurate description of the process that I have every seen. Nicely done post.
Very moving, Carla, I can feel your passion in this story. Suggested for a feature even before I scrolled down here to comment. Glad to know I'm not the only one who thinks your post is worthy. And Congrats on your #2 spot in the entire State of Oregon, you look good sitting next to Todd :)
Melissa, Actually I did know based on a previous blog that Carla posted that she was planning on writing this. I was up at 4 am and saw her earlier post. I'm sneaky that way!
Excellent post Carla! These are just houses to the banks but they are HOMES to the people who live in them. If someone is hiring a Realtor for a short sale or loan officer to talk about modification, that professional needs to understand everything that you just laid out here so well.
Hi Carla, Great post!! I've seen many of my neighbors and friends go through the "other" 6 phases. What really burns me about the article is "the bottom line" where Ms. Investopedia states: "many lenders will attempt to make arrangements for the borrower to get caught up on the loan and avoid a foreclosure"....oh, really, and who are these benevolent lenders? jay
Carla - This is too common a story, and I think too many of us are hearing too many of them. Perhaps the whole country is becoming jaded or immune. This post brings it back down to the human level.
For every jerk who can pay an expensive lawyer to negotiate a "strategic default" there is a single mom losing her home and getting just too tired to fight. Do I think there is a moral component to who I work with and who I help -- absolutely. Thanks for this post....sometimes I need a little bucking up and this makes me more energetic about what we can do.
Carla, really great post with a lot of heart. Just want to cry. Ralph #11 is so right, people want to keep their homes, and they do everything they can until they just cannot any more. I'm glad this was featured -- it's about people. Thanks, keep up the great posts.
Carla: What an absolutely great post. I see that you have been given a Gold Star for this post, and that it has been Featured. Congratulations. If ANY post has ever deserved TWO Gold Stars, maybe even three... this would be it. What a great understanding you have shown here as far as what folks go though emotionally and psychologocally as they go from home ownership, through the tragedies you list, and then to either foreclosure or short sale.
Sure, for some it's just "walking away"... but for many others... it really IS the death of the American dream. Again... great post. Take care...
By the way, if I lived in Portland, and needed a Realtor... you would be the one I would call. I just love both your empathy and your expertise. What a great combination.
Thanks, Carla, for saying it so well and cleaning my tear ducts out! I'm with Karen Anne . . . you definitely have empathy and expertise. I'm subscribing to your blog so I won't miss the next post!
I have been working with homeowners trying to get modifications, making the trial payments and hoping and praying that the trial modification becomes permanent.....some are 18 months later and still riding the roller coaster!
So many of these "how to" articles totally omit the human side of the equation. You have done an excellent job of shining a light on exactly what happens to a person during the process of a distressed sale.
Carla, this post is a piece of art. You got right to the heart of the matter. These are not deadbeats, these people are good people who got caught up in the economic downturn. They are our neighbors. I just loved how you put the human face on this.
Carla - how well put! Plus, you get Dick Dastardly bonus points in my book! He was my fav when I was little.
When we forget the human factor in foreclosures, we become less humane. And the kicker? (Back to your credit scores!) Landlords that won't rent to tenants because of poor credit scores caused by the foreclosure! While there are some laws to protect people in these situations, it's all to easy for landlords to bypass them . . .
I hear this and deal with it all the time. It is so sad, as many sellers in MI are in that situation. Most of the folks out there experiencing it have lost jobs, either one or the other or both.
Hi Jenna . . . thanks I wrote it then had a busy day yesterday. Sorry I didn't comment right away. Did you listen to the song by Gil-Scot Heron?
Hey Melissa -- I mentioned that I would be writing this to Jenna :-) Yes, agents working in the trenches, out in the field every day, talking and meeting with homeowners really hear the stories.
Hi Deborah . . . thanks for the re-blog. It was hard to write. The song I included "he was always such a good man. He was always such a strong, strong man."
Hey Cynthia -- thanks for the recommend. I wasn't vying for the #2 stop, but I just blog and blog away. ;-)
Hi (again) Jenna . . . you're up at 4:00 a.m.!! I am too, when worries trouble me.
Hey Jane -- a lot of people do try. It's overwhelming.
Hi Lori . . . The generalizaitons that some people make (hmmm #23) paint that picture that ALL homeowners behave in this way. I think it's the sensationalism of the press that puts a lot of the horror stories, the trashed houses, in the fore-front. If it's not a story about stolen pipes in the house, and/or torched then it's not a story, and no one cares that a homeowner was foreclosured.
Hey Jay -- yes the one line, which as you write "where are these benevolent lenders?"
Hi Diane . . . it is going on across the country, various degrees, various stories.
Hey Jodi -- thanks for the re-blog
Hi Ralph . . . I agree. People try, hope
Hey Christine -- we hear it when we work in the trenches with the homeowners. I don't get much contact since I practice EBA, and don't list. But when I scan the listings and it's Short Sale, REO, I know that was another family who went through the wringer.
Hi Leslie . . . I love your comment. Mostly because you look so sweet in your photo, and then pack a whallop!! ;-)
Hey Pamela -- I'm working on doing a little more. Details in the next few weeks!!
Hi Karen Ann . . . WOW! Thanks for the nice compliments. Although, it's a tragic situation, which doesn't bring much comfort for many. The words don't make up for the fact that many have only pieces of dreams remaining.
Hey Valerie . . . thanks. Talk about tear ducts, when I listened to the song Pieces of a Man, that was it for me.
Hi Donna -- yes, the length of time is so trying on peoples' nerves. The waiting, stall and delays. This frays people!!
Hey Claudette . . . all those "foreclosure" sites too. AGHHH!! For each foreclosure, there is a tale of a homeowner.
Hi Kathryn -- what a nice compliment. But, mixed emotions on receiving it because of the tragedy going on in our Nation. You're right. They are our neighbors. I see the chopping block auction signs around my block now too.
Hey Richard . . . that is Snidely Whiplash, of Doodley Do-Right cartoon fame. He was always trying to tie up Nell on the railroad tracks. Gosh, that is a good point you bring up about the credit scores affecting abilities to rent. It might be short-lived, since apartment complexes have a goal -- to fill up and have 100% occupancy.
Hi Missy -- yes, your area is very hard hit! I'm sure your stories of real life could fill a book, let alone a blog post.
Great post Carla, the reality of what is going on in our communities are so severe and some people don't understand how hard it is and can be until it hits close to their home...
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On Real Estate MSN there's an article: 
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Carla,
I have been looking forward to this post all day. I am so glad that you took the time to write it. It has been flagged for a FEATURE!
Excellent job!