The night before last, I met a friendly woman we'll call Susan, who six months ago had moved with her retired husband from Oklahoma to Las Vegas. They had sold their Oklahoma home and left behind long-term friendships so that they could be near their pregnant daughter and her husband. "In a drunken moment, I happily agreed to move out here and babysit for my first grandchild," she said. Susan has been doing just that for the last six months, since the baby was born. The young parents both work long hours and it seemed like a good proposition for all--at least in the beginning.
Scattered comments from Susan convinced me she was trapped because of real estate problems. It seems the young couple had purchased their first home in Las Vegas with a stated income, 100 percent loan that has resulted in both interest and lifestyle adjustments. Because of rising mortgage payments, both parents must work and simply cannot afford childcare costs. Selling their home is not an option because of the listing glut in their neighborhood.
Grandmother Susan now babysits 60-plus unpaid hours per week, has no friends, and feels hopelessly trapped. I suggested she encourage the young couple check into the ACORN loan program for refinancing alternatives. Perhaps with the savings, the young homeowners could afford to hire a babysitter and Susan could go back to work, which she is anxious to do. She might even be able to contribute to the babysitting costs. If that doesn't work, then perhaps the couple will be left with no alternative other than a short sale. Rentals are relatively plentiful in Las Vegas and might afford some financial relief for the couple.
As real estate professionals, most of us are becoming intimately familiar with this Perfect Storm in real estate where market glut and inappropriate loan products have combined to rip off the financial roofs of many homeowners. I guess this is the first time I have seen these circumstances ripple over to grandparents who have no mortgage problems of their own.
Susan says she wants to go back to work, meet new friends and once again welcome her visiting grandchild and their parents. She wants to reclaim her life. When I suggested the possibility she make friends with the neighbors in her new neighborhood, she shrugged her shoulders and said it seemed most of her neighbors were in the same boat as her daughter and son-in-law. The homeowners are working long hours to make mortgage payments.
I can't help but wonder how many grandparents are indirectly toting mortgage costs for which they never bargained?
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