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For Those of You Who Aren't Facing Foreclosure

By
Managing Real Estate Broker with Howard Hanna Rand Realty License # 49FA1074963

Karma CupSomething I read on Facebook earlier made me just a little sad. Chris Somers asked for opinions on the banks' role in the downturn versus the borrowers, and one of the comments was just callous. This isn't the first time I've heard it. I just wish it were the last. Rather than get into a flame war on Chris's Facebook, I thought I'd take the classier safer route and preach from my own soap box. 

If you are fortunate enough to not be in financial difficulty, are current on your mortgage, and view the recession from the sidelines, it is incredibly unflattering to say things like "man up and admit you bit off more than you could chew" or "nobody held a gun to your head and made you sign for that mortgage." I suppose that when the initial sub prime crisis hit in 2007, the majority of borrowers in default may have been irresponsible or naive. The loans were, after all, terrible products. 

But today? People I deal with today literally did nothing wrong except lose their job. They bought within their means, got fully documented legitimate conforming mortgages, and, in short, did everything people in this country have done for generations. 

Except lose their job. That wasn't in the plans. And they didn't lose their jobs because they were bad workers, they got downsized because of the recession. Oh, and the banks played more than a passive role in the recession, as we all know. If you've ever been called by a banking rep from overseas you'll understand. 

Almost half of my company's listings are short sales. Here is a partial list of the reasons for the short sale status:

  • Unemployment. 
  • Cancer and illness. 
  • Sick relative forced relocation when they were  current on their payments but under water. 
  • A few were victims of predatory lending. 
In years past, if you lost your job or faced trouble you could sell and cash out a year's worth of expenses, saving your credit and sanity. Not anymore. These people didn't do anything wrong except hit a string of bad luck. None of these people bit off more than they could chew. None of them got a "liar loan" where they stated their income or employment falsely. 
 
So, for those of you who cast judgment on people in distress, you obviously never dealt with the uncaring staff at a lender. And, you are fortunate enough to still have your job. That is the only difference between you and the clients I have, and student of irony that I am, you better pray tonight that you are spared their fate. There is no stress like facing the loss of health or home. Count your blessings. 


Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

It is very unkind of people to believe that everyone losing their home did something wrong.  Where is their compassion?  The way they judge others is the same way they will be judged according to the good book. It's very sad...and I am very grateful God doesn't think like humans!

Sep 24, 2011 02:30 PM
Marge Piwowarski
Phoenix AZ Horse Property - Phoenix, AZ
Phoenix AZ Horse Property, LLC

Judge not, that ye be not judged.

 

The most ignored line in the Bible.

Sep 24, 2011 02:42 PM
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

I have learned to be more compassionate. Bad things CAN HAPPEN to good people.

Sep 24, 2011 03:04 PM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA
Phil...thanks for saying this. It is important for people out there to hear and understand. There but for the grace of God could go any of us.
Sep 24, 2011 03:14 PM
Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

J Philip,

There are so many people who are just a job loss or health crisis away from being in the same position.

Rich

Sep 24, 2011 04:01 PM
Valeria Mola
SIB Realty - Miami, Sunny Isles Beach - Sunny Isles Beach, FL
305-607-0709 SIB Realty Condos for Sale and Rent

Who was more accountable - the borrower or the bank? Both.

I still believe, no money - no Bal Harbour shop.

Same with the mortgage. No saving to hold on to the property - rent it, it is safer!

Sep 24, 2011 04:19 PM
Charles Stallions Real Estate Services
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

It is amazing the government can give people food stamps to get food for free, a free phone, never ending unemployment benefits, free health care and they cannot figure out home to solve the housing crisis ( actually the don't want to solve because they want us dependent on the government). All they have to do is reset all mortgages to an affordable rate whatever that is based on income and get out of the way.

Sep 24, 2011 05:38 PM
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

These various "crises" will not be satisfied until wealth is created again.  The gubment cannot create wealth.  Giving "free" this and that is removing water from one end of the pool and pouring it back into the other end.  It accomplishes nothing.  The only thing the gubment can do is get out of the way, and eliminate all of its crushing burdens, regulation, licensing restrictions, spending, control and power over the individual.  Can they do something about the housing "crisis," which they created?  Yes, get out of the way.  Will this bunch do that?  No.

Do you really have a karma cup?

Sep 24, 2011 09:52 PM
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

Sorry *  As someone who works HARD to pay my own mortgage AND keep a mortgage current on an investment property, AND who has thought it important enough to carry health insurance for the last 50 years, I think that the sooner those who need help get it - from an agent OR a property manager, the better!

Moving for better job employment and RENTING a "underwater" home, is a viable option

Sep 25, 2011 12:34 AM
Broker Nick
South Florida Real Estate & Development, Inc. - Coconut Creek, FL
Broker Nick Relocation Broker Service

Congratulations - This post is now featured in Silent Majority Group of Active Rain!

Sep 25, 2011 12:47 AM
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Eighteen Years Experience in Brevard County

There are those who are judgmental, arrogant, callous and uncaring. There are those that are understanding and willing to help those who are facing issues.  If they are lucky, they will not have to deal with those mentioned in sentence one.

Sep 25, 2011 12:58 AM
Gail C. Harris
Resource Network, LLC SFR, AHWD, ACRE, SMAR Board Director - Chesapeake Beach, MD
Reach the BEACH with Gail C. Harris (cell: 703.868

It's funny because my husband says that to me, "nobody put a gun to our head" when I complain about no one doing anything for those of us who work hard and keep making our mortgage payments.  My neighbors who paid $745,000 for their home sold it is as a short sale last month for $433,000 with $13,500 in closing.  Love what it does for the neighborhood prices.  And, I don't see them coming back anytime soon.  And, our prices have always been over-inflated because we live so close to DC where the unemployment rate is lowest in the nation.

I wish the government would start doing something for the people who didnt' bite off more than they could chew, who are hanging in there, who's credit score is near perfect, and who have always done the right thing.  Yes, I feel very fortunate that my husband and I still have jobs but everyone on our block still does.  We're too close to DC for people to be out of work, unless they really don't want to work!! 

I do feel sorry for those struggling and who have lost their jobs but I feel sorry for the ones of us who continue to pay mortgages on homes that are worth about 1/2 what we paid.  We purchased in 2006 and our home is worth about 1/2 what is mortgaged.  Lovely.    We are nearing retirment age, and in order to retire and move to a slower paced area we will need to write a huge check out of our retirement funds.  I think that stinks.  

When do the people who do everything right get a break?  When do our taxes stop going up?  When does the government give us a life preserve?  And, the rich get richer and the poor get poorer! 

Sep 25, 2011 01:01 AM
Gail C. Harris
Resource Network, LLC SFR, AHWD, ACRE, SMAR Board Director - Chesapeake Beach, MD
Reach the BEACH with Gail C. Harris (cell: 703.868

And, PS... I am not unsypathetic to those who are ill or have lost their jobs.

What I see more and more are people able to leave their homes so they do.  There was a time when those who needed to got two jobs, both parents worked, kids kicked in when things got tough. Now, it's easier for people to just walk away. 

People who can are so mad about the loss in their homes that the purchased of late, if they can walk away they would rather do so.   Credit scores get a two year hit for short sales.  My neighbors said they'd rather be forgiven $350,000 than have to pay it back!!  I'm sorry, I see more people walking away because they can not because they have to.  Maybe it's not that way in your area but more and more that's what I'm seeing. 

Sep 25, 2011 01:08 AM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

Phillip good post, it is so easy to point the finger without knowing the details of each and every situation. Just like real estate is local every foreclosure, short sale is a different situation and there is no National one size fits all reason that people are struggling with these things. Part of our job is to listen to our clients and then guide them through the process of either buying or selling their home and making the best of whatever situation they are in. Thanks for the reminder to be a little more compassionate and to listen harder before commenting.

Sep 25, 2011 03:54 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

I think our opinions on this are shaped by what we see  in our local markets.  Northern Virginia has very low unemployement compared to other areas.  We see TONS of strategic defaults and folks who really did bite off more than they could chew.  When you go to a Short Sale listing appointment and you find out cars, boats, trips around the world, etc were financed on the HELOC, well, it's easy to get a bit jaded.  But like you said, your market is seeing much different scenarios.

Sep 25, 2011 04:50 AM
J. Philip Faranda
Howard Hanna Rand Realty - Yorktown Heights, NY
Associate Broker / Office Manager

Chris Ann, I see none of that. I do see people my age who should be able to take their foot off the gas peddle just a little, who are back to zero and work harder than they did when they were 30. Many lost their job or got sick, and they spent their savings down to nothing to fulfill their obligations. 

Sep 25, 2011 05:02 AM
Eileen Hsu
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

I am always amazed how compassionate you are. Sellers (foreclosure or not) are lucky to have you on their side.

Sep 25, 2011 05:22 AM
Morgan Evans
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Excellent blog Phil. Everyone should be more compassionate, sympathetic and considerate when one faces foreclosure.

Sep 25, 2011 06:27 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

They didn't have my Mother, apparently.  The finger pointing always leaves three pointing back at you.  I don't finger point . . . unless it's the government, and then I toss them the bird finger!  Sadly, many borrowers LISTENED to their mortgage broker who said "Ah come on . . . take the ARM.  You can refinance the second away when interest rates drop."  Yup interest rates dropped . . . so did the housing prices.  Can't refinance . . . what to do, what to do?!?  "But for the GRACE of God, go I."  Where is Charles Dickens when you need him to pen another masterpiece about the current state of affairs?

Sep 25, 2011 08:54 AM
Amy Bly
Great Impressions Home Staging/Interiors - Montville, NJ
Styling Homes for Selling and Staying

Your post moved me as well. I can't stand judgmental people and always root for the underdog. I am always sympathetic to anyone who is underwater, has lost their job, or has health problems that slow down their earning ability -- the latter is something my husband and I have had to deal with as well. I worry all the time about where this country is going with this seemingly never-ending bad-news economy, what will happen to so many people who can no longer rely on living in their houses and pulling money out of them to live off of or provide for their children (in our case, we have a disabled child who we constantly worry about providing for long-term). Real estate used to be such a steady, safe investment; not sure when it will be again.

Sep 26, 2011 04:48 PM