I have had so many e mails from many of you who are very depressed about realizing you are going to lose your home. You made unwise decisions and now are going to have to pay a very heavy price. Some of you are even talking about suicide because you feel like total failures who cannot even hold onto the place you live. I think if you are facing foreclosure, you need to understand what is actually going on and the steps taken. I want you to be able to step back and see that this is a death by a thousand cuts and there will not be much you have control over when the hammer comes down. It doesn’t mean you are worthless and no good. It means you took a gamble, were optimistic, and believed all the crap you read and heard that housing prices could only keep going up and away. And if you have been around any time at all , you know the bail outs are for big money, not the little guy.
Here’s what plays out:
1. You can’t pay the mortgage because you are trying to put food on the table and pay for gas. You are living in your home but have that terrible feeling that it won’t be for long.You gasp when your interest rate jumps through the roof. You receive a stern letter from your lender saying ‘pay up or else’. You call a realtor, hoping to escape with your skin. The realtor can’t sell your house because there are too many homes in foreclosure already.
2. The realtor optimistically suggests a ’short sale’ by persuading the bank to take a little less money. The realtor is thinking tens of thousands. The bank is thinking a thousand or two. The bank is not ready to ‘write down’ their loan and unload. Buyers stop viewing your home because they cannot steal it.
3. The bank decides to foreclose and yet another realtor proposes a ‘pre foreclosure sale’ which is a spin off of the ’short sale’. Buyers are supposed to be drooling over the possibility of being able to possibily run off with a bargain. But no, the bank is not going to ‘give it away’. You are ordered to leave but the bank may offer you a few thousand to go quietly if you promise not to trash the home and wreak all kinds of damage on your way out.
4. The bank then takes your home to a ‘foreclosure auction’. This means the first mortgage holding bank buys the house back in for what it is owed. It only has this auction to ‘blow off’ second mortgages and other liens.
5. Now the bank hires an REO real estate company to ‘dispose of ‘ your baby.We are having ‘absolute auctions’ frequently in Florida which means you get what you get for the house, no reserve. Then you owe the bank for the difference between what your house was auctioned off for and what you owed.
You never want a foreclosure to happen and the bank is not exactly thrilled to take your house back. So you keep trying to ‘buy time’ during the process at which time you are getting more and more depressed. How could this happen to you? You wanted to be a home owner and thought you were following the smart crowd. Turns out you were playing follow the leader with sharpies who have long disappeared with all the ‘bubble money’.
Financial desperation is one of the prime contributors to major depression and people who suffer from major depression often consider suicide. We need money to live and when the money is not enough, we become hopeless, feel inferior and incapable, and tell ourselves that we are failures.
I have a sneaking feeling that we are going to see a spike in suicides when all this foreclosure business shakes out. Feelings of failure, hopelessness, anxiety, frustration, and isolation can do horrible things to our internal thinking processes.
Please, if you are in foreclosure and seriously depressed find help through your doctor, social services in your area, and look for opportunities to keep you head above water by using such things as food stamps and food pantries. Let friends and family give you assistance. Pride goeth before the fall. Live through this horrible ordeal. Survive. Try to pull all your resources together and find a way to live in a way you can afford. Yes, a bankruptcy can ruin your credit and have an effect on job searches. But it is what it is and if you can just survive at this time, you will move forward soon.
Send us your foreclosure stories. We want to find out how you personally have suffered. And we are praying for you every day.