by Neighbor Guy
Hi. I’m your neighbor, the guy in the front apartment that opens to the parking lot. And I’m a (hopefully) soon to be former homeowner. Why hopefully? Because the bank still hasn’t filed a Notice of Default, the document sent to the county recorder that starts the foreclosure process, even though I haven’t paid my mortgage since I moved out about six months ago and I told them even before that that they’d seen the last of my money. Why former homeowner? Longer story…
First off, call me a guilty party in the current housing/banking fiasco. I busted my ass during the housing runup, and made a damn good living doing it. Too good for a kid in his early twenties with little clue how the world, most importantly including market cycles, worked. Back in the early 2000s I bought a house way beyond my means…it may have been at the behest of my mother and in an attempt to pacify my ex-wife, but ultimately I signed on the dotted line, so I’m the one that made the stupid decision to buy it.
Upon divorcing, I tried to right my wrong. I moved out of the stereotypical 2-story with a yard and a pool in the suburbs and into a little one bedroom on Abbott. I put a good chunk of my savings into cleaning up the old pad and put it on the market. Where it sat. For almost a year, while I was paying rent, paying the mortgage, and watching what was left of my savings account dwindle. During this time, I found love again and took on a father role for my partner’s young daughter. Suddenly a little one bedroom didn’t work, and it seemed foolish to let an unwanted house sit on the market when I needed some space if my new love and I were going to move to the next level.
So I refinanced the house and moved back into it. And promptly lost my job. I was one of the lucky ones – I was out of work for a very short period of time before finding another job…at about half my old pay. Over the next few months while I was cutting my teeth in the banking industry (a lot more, even juicier stories to come from that later), the rest of the savings evaporated and credit cards replaced reserves as my source of funding. Eventually I scored enough in raises (well, mostly overtime hours) to barely cover the cost of living, but by now the value of my house had sunk somewhere by somewhere around a hundred g’s, I was mired in debt, and I was pulling my hair out after watching my dream of establishing permanent residency in OB evaporate after only 10 months or so. My house was falling apart, and I had no more money to sink into the thrashed flooring, leaky plumbing, faltering appliances, or dying landscaping – 70 hour workweeks and minimum payments to Visa, Discover, et. al. were taking their toll.
Fuck it, the girlfriend and I says to ourselves one day. There’s no way we’re ever going to be able to dig ourselves out of this hole under the mortgage, the last couple years of trying have proved that. My house is barely worth what I owe on it, my down payment and the last five years’ worth of payments are all for naught. I can’t sell it, as earlier escapades have proved. So I find myself another little apartment (at least this one has an extra bedroom for my stepdaughter), sign a lease, and start packing. We move out of our house on the first of August. A couple days later I call the lienholder to ask if they can guess what’s not in the mail. Check. I try to explain how I’m burned out after trying to sell the house after a year of futility, and how it’s worth pretty close to what I owe them (from my new job I understand what a wonderful position it is to be in where a lender is losing only a few grand).
I tell them I’ll walk away now, sign over any interest in the house to them, and they can take over a clean, empty house just needing some minor updates before it’s ready for someone else to move in. I deal with thousands of reposessed houses on a daily basis, so I can attest to the fact that the one I’m offering them is cleaner and more market ready than 99.9% of what they’re accustomed to dealing with. No dice.
I tell them I’m so deep in debt that I have no intention of borrowing any more money in the next decade, so they can ruin my credit in a vindictive nature if they want and I really won’t give a shit. That doesn’t fly.
I tell them properties in my ZIP code are depreciating at a rate of about 33% a year, or 2.75% every month. That if they wait the typical 90 days to file the Notice of Default (NOD), and then follow the 120 day foreclosure process, the house that was worth about $540,000 when I borrowed $440,000 and is now worth $450,000 will be worth about $370,000 by the time they get it back if they don’t take it now. They don’t care.
The bank’s collection department calls me every week or so, and I repeat the same story I’ve been telling since early August. The last girl at the call center in Florida told me she’d heard about me over a smoke break a couple months back – I’m a sarcastic, cynical, yet generally personable sonofabitch, so that makes me memorable. She’s really sorry she can’t do anything for me, says she feels my pain, especially since I’ve been handed yet another layoff notice and have only a couple more months left on my current job.
About 6 months after I quit paying, my house in decent shape would be worth about $385,000, a little more than I’d anticipated. But I drained the pool so the neighbors didn’t have to be subjected to a nasty swamp-bog (too bad rain hasn’t cooperated in my attempt at common courtesy), so the fiberglass lining and pumping/filtering/heating equipment are shot, causing about $20,000 in damage due to neglect. About $5,000 worth of landscaping has died off. The entire plumbing system is likely now damaged due to the water being shut off an excessive period of time. The HVAC system is likely in worse shape now than it was this time last year. And after the bank made it abundantly clear to me they weren’t interested in cutting their losses, I let my buddy’s band start using the house as a practice studio in my own showing of vindictiveness. Chalk up another few grand in wall damage due to the installation of soundproofing and who knows how much more wear and tear. And the bank hasn’t even begun the 4 month foreclosure process, during which the house will likely lose another $40,000 or more in value.
A common-sensical institution would’ve taken the $30,000 or so in profits while I was able to make payments, then cut their losses at the break-even point when asked. This bank, which I’ve seen through extensive industry experience seems to be swinging pretty much par for the course, decided to take that break-even opportunity and parlay it into a loss of $200,000 or more. You can say I should be on the hook for that loss, and I wouldn’t blame you for blaming people like me for fucking each and every one of us. But even though I want to own up to my mistakes I’m barely in the financial situation to try and make right by my other debts, and I’m in a hell of a lot better shape than most people in my predicament. This problem was evident to the banks, clear as day, months, if not years before it came to a head. And they didn’t do shit. Now they want someone else to cover their losses. My stance is that the losses would’ve been manageable if they’d have acted prudently. So fuck ’em.