Jim has Baby J at his mom's house tonight so I have the house to myself. I figured it's been awhile since I've blogged. Now that I'm back to work time seems to vanish plus I haven't been ready to write this post but I feel I need to do it as it will help with the healing process.
Some people know and others don't but a few weeks ago my house foreclosed. I ask that you read this entire post before jumping to any conclusions or forming any judgements. Let me give a little back story. Jim and I bought our house in June of 2006. We had just gotten married and isn't it the American dream to buy a home? I knew a realtor from my old job and set up a meeting just to see what our home purchasing options might be in the future. I never dreamed we would be able to purchase something at that time. The more we talked the more it looked like we were going to be able to buy sooner than expected. So we decided to go look at some houses. Little did I know I would find something I loved our very first time out. When I get an idea in my head I don't always think it through. I become so focused on the present and the want that I don't look ahead to the future. This has come back to bite me in the ass more than once.
Jim was more apprehensive then I was when it came to home buying and I admit I persuaded him strongly into submitting an offer even though I knew he wasn't ready. Had I listened to his concern I probably wouldn't be where I am today. But I was young, feeling pressure from the realtor to "not let it get away," and in love with the idea of buying a house.
Our offer was accepted the next day and the whirlwind of escrow began. This is when everything started to spin out of control. The combination of our realtor's lies, the corruption of our loan officer and me being completely naive spelled disaster. In the end instead of being elated to be signing closing documents I was crying. At that point I knew we had gotten in way over our heads and I didn't know how we could back out. I thought we were locked into the deal and that was it. If only I knew we could have walked away.
While we could afford our mortgage it was by no means comfortable. Jim and I were working at full capacity every month and just hoped nothing major went wrong. If it did we knew it would wipe us out completely and we would be finished.
People tried to tell us not to worry. We would "grow" into our mortgage as we got raises and things like that. As we paid off principal our equity would increase and everything would once again be all right. Perhaps this would have been true but we all know what happened at the end of 2006. The housing market plummeted and continues to do so.
Our neighborhood was hit hard and we eventually found ourselves more than $150,000 under water. This is when Jim began doing some serious research. We knew something had to be done. There was no way we were going to be able to recoup the equity we lost anytime soon or even at all. The house was getting older by the minute and although we had been lucky to escape with little maintenance we knew this trend wouldn't last. Loan modification was not an option we qualified for nor did we want or need to file for bankruptcy. Jim finally came across a method to get out of our bad investment. It was called a strategic default. It is where a homeowner who is so upside down basically walks away from the home and gives it back to the bank.
We consulted a lawyer before proceeding with our plan. The lawyer told us many people were doing what we were about to do and with new laws passed we would not have to pay taxes on the remaining principal like in the past (it use to be if your house foreclosed the loan balance was considered earned income and you were taxed on it.). Had we refinanced it would have been a different story and the bank could come after you for the money. But because it was original purchase money the bank had no recourse.
It was one of the toughest decisions I've ever made but in October of 2010 we stopped paying our mortgage. In the meantime we attempted multiple times to do a short sale but Bank of America would not cooperate and approve it. That in itself is a whole other story.
I have had many emotions about this whole process. In the beginning I felt guilty. I felt I was contributing to the economic crisis not helping it. I was scared of what life would be like once I lost my near perfect credit score. I felt a sense of relief because I no longer had the burden of this outrageous mortgage resting on my shoulders. I was angry at my realtor and loan officer for lying to me and more angry at myself for allowing it to happen. But most of all I was sad. Sad that it all came down to this. My American dream was crushed.
In the end I do not regret our decision. While it has been a rough road and emotionally draining it was the best thing to do for our family's financial future. I learned a lot of valuable lessons along the way so I don't look at it as wasted time. After all that Jim and I have been through I know if we can survive the strain this house put on our relationship the first years of our marriage, we can make it through anything. I now think through big decisions and don't act on impulse or fantasy. Most importantly I now know the importance of being educated when making a decision that could seriously impact my family's future and not to rely on others, especially if they stand to benefit from it.
I think I am finally at peace with this. There is a song by Mumford and Son's called "The Cave" that makes me think of my whole house situation. It has nothing to do with foreclosure but I was listening to it as I pulled out of my driveway for the last time and it just seemed to hit home. There are a few lines I think about anytime I start to get emotional about everything:
I will find strength in pain
And I will change my ways
I'll know my name as it's called again
'Cause I need freedom now
And I need to know how
To live my life as it's meant to be
One day I hope to buy again but I will go about it in a much more responsible way.
