Coming Home To Roost

I've listening to reports about the housing market and how there is a crisis of people defaulting on their mortgages. Due to my own experiences I'm having a hard time mustering any sympathy for the pains and troubles of American financial institutions. To me, it seems like the chickens coming home to roost after years of predatory practices.

My own story is a good example. After my aunt died and my mother inherited full ownership, we realized that my aunt had left behind a $30,000 mortgage bill. My mother, who was retired, certainly didn't have the means to make those payments. So it fell to my wife and I.

I decided that I didn't want to pay off a $30,000 mortgage that wasn't in my name. Especially with it being clear that the house would be our responsibility from then on. All I could think about was building our credit, and we certainly weren't going to do that by paying off someone else's mortgage. In retrospect, that was just stupid thinking. The mortgage payment at that time was $250 a month. You read that right. That was the house payment. And I wanted to refinance.

That began a long series of mistakes. Mostly because we didn't have a realistic picture of what we could expect. We went to the local branch of the financial institution that had held my aunt's mortgages and loans for decades. We negotiated a loan. All I wanted to refinance was the $30,000, to get our names the mortgage. But I was convinced by my mother to get more money (the house WAS in desperate need of repair). We wound up getting $54,000. The payment jumped to over $600 a month. Fine, I thought. We'll pay this for about a year and establish a stable credit history, then we'll refinance for better terms and a lower payment.

Well, about a month after we signed our mortgage, our bank turned around and sold the mortgage to the grand-daddy of predatory lenders, Countrywide. The first thing Countrywide did was raise our payment. Twice in a relatively short period of time. Before long we were paying almost $700 a month. Fine, I thought. The plan still held. We'd pay these pirates for a year or so and refinance for better terms.

What we hadn't counted on was the unexpected. Okay, that's redundant, but you know what I mean. My injured her hand. That eventually led to surgery, which put her out of work for eight weeks. That was shortly followed by Hurricane Katrina, which saw me (the truck driver, remember?) sitting on a FEMA load of bottled water for over three weeks (during which time I drew no salary). The combination of these two setbacks threw us under the proverbial bus. We got behind on our mortgage.

Countrywide's solution to help us rectify the situation was to let us pay a payment and a half every month until we caught up. Our mortgage payment jumped to over $1,000 a month. And with interest and penalties, it was pretty clear we were going to have a hard time catching up. This was all at a time when my wife had stopped driving and I was making little money as a solo (both of which effectively cut our income in half). I was optimistic until the very end. My wife, however, saw no alternative but to file bankruptcy, and she did. I fought the good fight on into the next year, and by the end I was single handedly (my wife left early in that year) paying Countrywide $1,500 a month to try to keep that house. I finally gave up the fight in August of 2006, about two years after refinancing.