By J. G. Robinson / San Diego Free Press
In my last column I began the story of someone I call Jose, and what led to his financial crisis. In this column I look at the Kafkaesque process he went through in his failed attempt to save his home from foreclosure. The experiences I describe here are neither rare nor random. The difficulties Jose and his family encountered in trying to get their bank to re-evaluate their loan were all too representative of the random sample of people I interviewed. The tragic fact is that the delays that Jose’s family encountered were not the result of inefficiency, but rather a deliberate policy to protect banks. Banks do NOT want foreclosures rapidly resolved because that would bring these properties down to market value, reflecting badly on their bottom lines. Thus families like Jose’s are the deliberate casualties of a war of attrition that banks have waged on the public to protect their economic interests.
Jose’s original mortgage was through the Bank of America. The home was a modest condominium in a somewhat marginal area of El Cajon. Marginal, but not horrible—the schools in the area were decent, and that was the main attraction for Jose and his family. It was also supposed to be the source of future stability for the family:
I got tired of renting. I proposed to my wife that we make a purchase, first and foremost for me it was secured equity for the future. My son was born in 2001, and my whole thing was to build up an equity for him so that when it was time for me to retire or pass-on I wasn’t going to leave him without anything. So by 2004 we did it, we got our own place.
It is not a stretch to hear Jose’s own economically troubled childhood speaking here, nor, for that matter, the hunger for the “American Dream”. He was going to have something for his family; he was going to provide the security that he had not known as a child; he was going to be able to leave something to his son.
As was pointed out in the last column, this ‘dream’ began to unravel when his hours were cut back at work. He struggled to provide for his family and still make the house payments, but it was increasingly difficult. He had bought the condo for $280K., but by early 2010, with the San Diego real estate market in free fall, the value was only $130K. In spite of so much negative equity, he and his family kept struggling to make the mortgage payments month after month. Finally, after nearly two years of struggle, he had to admit defeat and go to the bank to see what could be done to save his home.
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