The Hard Facts, Part I: The family had about 8 of those blow up Christmas ornaments in their yard when I got their, all bobbing in the breeze, and lending a surreal air to the coming experience. I was there to tell them that they had little choice but to start looking for another place to live. Their debt was more than the house was worth and, after exploring all of the other options, it looked like we would have to try and negotiate with the lender to discount the property so we could get it sold.
We looked over the debt - 100% financing about 18 months ago and next month the rate was going to adjust. Bob had just gone back to work after being laid up with an injury, and Faith was on dis-ability with a long-term illness. I really liked them. It was obvious that they were very honest and trustworthy, they still had a nice sense of humor, but for all of us it was a little forced. What had to be said wasn't easy or funny. This was their life.
"What about the windows? I just put in 18 new windows" said Bob, and he went on to tell me that he signed a contract with the company who put them in. I asked him to see the paperwork, which he pulled out of a box by the refridge. I shuffled through, a sick feeling in my stomach, all I could think was "please let this be a second on the house or a home equity". But it wasn't, it was a personal debt loan. The windows also cost about 3 times what they should have, but hey, they were "free" at the time.........."And I got one for the furnace too" said Bob. You could see that he and his wife, Faith, were just about numb....
After looking at the docs, the paperwork, and then doing a CMA, I just had to wonder how anyone could have let them buy the house for what they did. It was obvious to me that these were pay check to pay check workers..there was no cushion, there was nothing, and now it was going to get worse. Christmas was 2 weeks away..at least the blow up yard ornaments still had some air.
"Alright" I said, trying to keep a positive feeling "let's look at where we stand and what your options are...."
Stay tuned for Part II - Making a Plan for the Future -
for NOW - Brad in Connecticut
Note: This story is ficticious but it might as well be the story you are going to hear everyday on every street corner in America very, very, soon. The names are made up in this story but I'm sure that 2 degrees of separation is one degree too much. We all know someone in trouble, let's make certain that we are the one's to be there to provide sound consultation for our clients BEFORE - DURING - and - AFTER. Feel free to contact me if you would like some insight on how best to move forward in this sort of situation. brad.whiteman@realliving.com
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