Fighting Off Foreclosure: One Woman's Three-Year Ordeal

Courtesy DeeWhen even a single home goes into foreclosure, the effects can be far reaching. In the case of Dee, when she faced foreclosure on her home in Prince George's County, Maryland, the potential hardship extended well beyond her immediate family.

Dee's home not only shelters some of her six children and occasionally her four grandchildren, but is also a place of refuge for neighbors, friends, and sometimes complete strangers who need a roof over their heads.

"I'm on the front lines of what's happening in our economy in terms of unemployment and people losing their homes," says Dee (who asked that we not use her last name). "I've been the neighborhood mom and have fed or given shelter to many people since I bought this house in 1999."
Recently Dee provided a safe place to stay for a single mother and her four kids. "She had lost her job and her apartment and was going to sleep in her car," Dee says. Dee and her adult children (ages 19 to 29) helped the woman get back on her feet. The woman found three jobs, started college classes, and gets her kids to school daily. Now the family is thriving in a safe environment.

Things could have turned out very differently for the woman, her kids, Dee and her family, and the entire community. And they almost did when Dee nearly lost her home.

Courtesy DeeThe First Blow

Dee says her home wasn't "comfortably affordable" right from the start, but she felt it was smarter to own a home than rent because she was a single parent with six children. She was fearful that rising rents would push her out of an apartment, so locking into a mortgage seemed to make more sense even though it was a stretch for her budget.

Dee worked for an international law firm and, thanks to her base salary and overtime pay, she was able to cover her mortgage. "I was diligent about paying my mortgage and I didn't refinance when my home's value increased," she says.

That changed in 2008 when her company eliminated all overtime. "My income dropped. Although I tried to continue making payments, my mortgage eventually became delinquent," she says.

She sought a loan modification to make her mortgage payments more affordable. "But the bank returned my loan payment and began the foreclosure process."

Then on Sept. 11, 2009, Dee and 43 other employees of her law firm were laid off.

The Harder Blow

Dee tried for three years to get a loan modification, repeatedly sending reams of documents to her lender. Discouraged after not receiving a favorable response -- and often, getting no response at all -- she placed her home on the market.

Not a single offer came in. Her home needed repairs she couldn't afford to make, and she was competing with a glut of foreclosures and short-sales nearby.

She stayed put long enough to benefit from the state of Maryland's moratorium on foreclosures. But eventually the moratorium was lifted. Then Dee received a notice from the bank that they were going ahead with foreclosure proceedings.

Courtesy DeeBad News Came with Good Options

Along with the foreclosure notice, the lender sent Dee information about some of her options. One of them was to receive housing counseling. She attended a housing fair sponsored by the Prince George's County government and met representatives from HomeFree-USA.

With the help of a counselor, Dee was finally able to obtain a loan modification.

She also benefited from recent changes in the law that permitted contributions from other family members to be included as part of the debt-to-income ratio, even if the person contributing is not on the deed, so they included one of her son's contributions to obtain the loan modification.

The modified loan payment is about a third less than what she paid three years ago. But it still requires careful budgeting and eliminating nonessential expenditures since Dee's income is approximately a third of what she made three years ago.

"When the resources that I thought I had, like a law degree and a job, disappeared, I had to learn where to find other resources," Dee says.

Another important lesson she learned was that you need to be brave enough to ask for help. Now she is just relieved that she has a house to save.

Right now Dee is in the trial period of her loan modification, which will become permanent once she makes three on-time payments for the reduced amount. Her future prospects look promising: She is just started a new job with a better salary, and she's doing something with which she has hands-on experience: assisting others with loan modifications.

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Reverse mortgages are currently one of the best ways for seniors to get the equity out of their homes without having to move or worry about foreclosures .

July 15 2013 at 3:52 PM Report abuse rate up rate down Reply

Vote for mitt Romney as Obama foes not know what he is doing and was never a governor only a senator
Where he did not turn up to vote a lot. Don't trust Obama why did he buy a prison that is not using,
Also why did he go to the Supreme Court together the second ammendment overturned and lost.
A president has never ever attempted to take away any of my rights except him.
The true Obama has not come out his Marxist,fascist side.Mitt Romney has a clear path and vision for USA.
Democrats are not for America just more spending which makes us more in debt.romney has created loads of jobs and will work with the congress which Obama never has. There are 100 bills sitting in the senate that the house has sent no response from the democrats. No budget in3.5 yrs! Can't wait to get change from Obama to Romney.Obama will bring us backwards. Americans need to wake up and understand the issues.

October 21 2012 at 5:23 PM Report abuse +1 rate up rate down Reply

You should save higher percentage down payment as base price
Paid monthly to lender can go up as taxes and escrow go up
Try no less than 30% down and you will have lower payment a month.

October 21 2012 at 5:13 PM Report abuse rate up rate down Reply

You should not make grammatical errors when writing.
Is should not be in that sentence

October 21 2012 at 5:10 PM Report abuse rate up rate down Reply

You never base anything on overtime pay,It could stop anytime and in her case it did !

October 19 2012 at 4:57 PM Report abuse rate up rate down Reply

These tragedies will only get worse under different than bush getting this country into this whole mess to begin with. Repubs/tbags don't care about anyone but themselves. I hope she can stay in her home and get her life back. She deserves to.

October 19 2012 at 3:35 PM Report abuse -2 rate up rate down Reply

It's not a toxic loan when you lose your job and find another one for 2/3's less from before. Of course you will fall behind.

October 19 2012 at 3:34 PM Report abuse rate up rate down Reply

Of course no one should bite off more than they can chew--however, in many cases,banks pushed these adjustable toxic loans with the statement: "This adjustable loan starts off with a lower payment and will save you money getting set up in your new home, and then you can refinance the house in a couple of years." The banks pushed these bad loans because they could package and sell them quicker with high commissions.The average person trusts a "banker" or loan broker as a professional and there is indeed a fidiciary, legal obligation on the part of the bank to give multiple disclosures and provide the "worse case scenarios" on these toxic loans --but this was not done adequately. These loans were ONLY going to work if the real estate market continued to go up and appreciate in value-- the vulnerable loans were like tires that only roll on a "perfect road" but blow out when they hit gravel or a bad spot. The bankers were the professionals and most people and especially first time home buyers trusted what they said. These banks pushed these loans even when people had high FICO credit scores and 30% down payment. The bank talked people into taking out the adjustable loan. 85% of all mortage loans in california are adjustables. There needs to be accountability on all fronts-- but so far the only ones arrested are the ones who were foreclosed, homeless and protestors in the "Occupy Movement." Nothing of any substance has been done for the collaspe of the U.S.

real estate market;

October 19 2012 at 2:52 PM Report abuse rate up rate down Reply
Catherine Petroskey

my new hero!

October 19 2012 at 1:43 PM Report abuse rate up rate down Reply

Yes, the whole banking industry in crooked. I was a single mother stuggling after death and divorce but was paying my mortgage payments. I paid my taxes a little after the due date but not late. The check was sent back to me and I was told that Chase paid them instead. I figured that getting the taxes escrowed was probably a good idea, that was until the letter came from the bank that I had to pay 3 years worth of taxes, either in one payment or over 1 year, this would have tripled my house payment because I did not have that kind of cash on hand. I sent the bank a letter and filled out modification paperwork and was ignored. What kind of system do we have when the banks actually go after taking your home even when you are making your payments?

October 19 2012 at 10:59 AM Report abuse +1 rate up rate down Reply