So, we’re all right. Most of these Americans losing their homes may be, too, though only after huge setbacks that will make them far less secure financially than they would have been for the rest of their lives.
My sister and I both went to college. I’m a journalist, newly married, and she’s raising a family. A few months ago she and her husband moved across the street from my parents… into a house bought from someone who could no longer afford the payments.
Me and my wife? We rent.
Ryan, as touching as your story was (and I say that with no sarcasm), we all know that most people facing foreclosure now are in the position they are in because of bad choices, not, as in your fathers case, bad luck.
I have sympathy for back luck, but less so for bad choices …. Especially when I am being asked to fork out money for it.
Posted by Carl Stevens on Thu 9 Oct 2008 at 11:20 AM
Americans' sense of compassion can be boundless to the point of gullibility. A media-stoked selfcentered consumerism has dulled our historically weak interest in others and accentuated fear - so, when we actually hear about a particular story that might personalize faceless enemies, welfare cheats, illegal aliens and a host of others unlike us, we have a chance to review the spin doctors' stereotypes dujour. I suspect we've actually past the point of being able to employ sound judgment and reasoned thought in favor of reductionist reactions. I recall having a business fail, through bad choices and, perhaps, bad luck. The pain and shame of it would have been greatly mitigated if taxpayers had given me $80,000 to cover my debts. The creditors would have benefitted. Cash movement would have increased and the economy would have gotten that much better. Maybe it would be a better idea to give every American $20,000 to pay down their debts, after all, Americans know how to spend their tax dollars better than Washington bureaucrats.
Posted by Peter Pintacura on Thu 9 Oct 2008 at 12:18 PM
The fact is anyone who owned a home and sold it prior to the second half of 2006 benefited from the housing bubble. That's good luck. Sure, some (and not many as suggested)knowingly got in over their heads, but the tide was going one way and most people just floated along. Now the waves are hitting the rocks. That's bad luck.
Posted by Douglas on Thu 9 Oct 2008 at 12:40 PM
Wow. Tough crowd. Ryan, it's a credit to you that you had the courage to speak up about your situation. How refreshing.
To my way of thinking there are three kinds of people who took out loans they couldn't afford.
1. Those that thought it was the only way they could get a home. I give them a free pass.
2. Those that were trying to keep up with the Jones. They get my scorn and derision.
3. Those that were trying to make a buck, the flippers. I hope only bad things happen to them.
Posted by keith robers on Thu 9 Oct 2008 at 01:39 PM
Thank you for this piece. I had a chance to buy and was desperate - but the fates never aligned and to this day I rent - This was a very touching piece and I wish more journalism were approached with this level of humanity and soul
Posted by Blake on Thu 9 Oct 2008 at 02:51 PM
Ryan: a very touching story, that reminds me my own experience.
I lost my job en 2001 Argentina´s crisis, and me and my family lost almost everything. As we rented, we had to move to a smaller apartment with my wife and kids. We had to sell furnitures, appliances and books to survive. Sometimes I got a job, but lasted for few months, because the countrie´s economy was smashed, and activity was almost frozen. That lasted for almost five years; and thanks to the help of family and friends we recovered, but very, very slowly.
This kind of angle never must be lost by a journalist; always there are real people behind the story.
Greetings from Argentina, and good luck for all of us.
Posted by Alejandro on Thu 9 Oct 2008 at 02:56 PM
Great article. We can see how people are so easily manipulated by how people have responded to your article. HELLO PEOPLE it was put in our faces that people could live a life style they could not afford. It's called Marketing and they marketers did their job. Americans are now slaves to debt. A sick plan but it worked. Glad to see people are still blind to the truth. Those of us who were smart enough to not fall in the trap just got pushed by the government. Saving bankers poor choices and making us pay for it is in all sense of the word slavery. My grandchildren will not even be able to repay all this debt. (my oldest is 5) We pride ourselves on being "free" but that is the farthest thing from the true. It's time we all stood up for our rights and put this country back in the power of the people and not the puppets we have now.
Posted by Dakken on Thu 9 Oct 2008 at 03:18 PM
This is a laudable idea for a story, but on what planet are you on? You chose your words poorly when you said: "...I’d bet very few business reporters know anyone who has been through a foreclosure or is on the brink. I’d go as far as to bet that, unfortunately, a surprisingly small number of working business reporters have even interviewed anyone going through a foreclosure.''
I say you'd lose those bets. Any business journalist worth his or her salt who has covered this issue has talked to and received emails from dozens of people in this unfortunate situation. If they haven't, they wouldn't stay on the beat long enough to be called a reporter. The sad thing is there are so many stories to tell.
Posted by Not a betting journalist on Thu 9 Oct 2008 at 03:32 PM
As a former reporter and editor of 20 years, I can appreciate why and how you wrote this piece. As a 45-year-old father of four who DOES know families going through this in Florida, I agree that the human stories aren't always one-dimensional. However, Ryan, what lingers from your story amid another bitter and deceitful campaign season is your suggestion that your parents were ashamed particularly BECAUSE they are "conservative Republicans." And I wonder: Are they still today? After benefiting from some of the liberal governance their kind so vilifies, can they possibly still justify voting for the braying politics of deregulation and false self-sufficiency -- because if so, THIS is what should shame them!
Posted by John on Thu 9 Oct 2008 at 03:39 PM
KUDOS for the real look into banks and their rip off practices. IMO, the banks who loan more than they have should be forced to offer up the guilty parties and these criminals should be given the maximum penalty under the law. I am tired of this game, and the way that some people chase money, and profits over people.
I have decided that the reason the powers that be hate Moslems so much is that Moslems don't believe in charging interest. This is the reason. It is inhumane to make money on other people's back.
We need to get rid of the Federal Reserve, and the IRS.
Then, we need to hold any bank accountable for it's actions.
Posted by Katz Freedman on Thu 9 Oct 2008 at 05:06 PM
I have decided that the reason the powers that be hate Moslems so much is that Moslems don't believe in charging interest.
LOL, HAHAHAHA, LOL! Ohhh man .. you gotta stop .. that shit was too much!
After benefiting from some of the liberal governance their kind so vilifies, can they possibly still justify voting for the braying politics of deregulation and false self-sufficiency -- because if so, THIS is what should shame them!
You might find this hard to believe, but many people despise handouts. Its called pride.
Posted by Carl Stevens on Thu 9 Oct 2008 at 05:48 PM
You might find this hard to believe, but many people despise handouts. Its called pride.
So what do you call it when they take them anyway, but deny them for others?
Posted by Alexia Katz on Thu 9 Oct 2008 at 10:32 PM
This was well-written, and makes me proud to know you.
Posted by Sarah Brown on Thu 9 Oct 2008 at 10:33 PM
Mortgage brokers played a major role in the mess the nation is in now. Until there is some sort of recourse to get back the money these con artists and frauds made by deceiving home buyers, government is not doing its job.
Posted by Wenalway on Thu 9 Oct 2008 at 11:51 PM
Guts.
Posted by Brian Byrne on Fri 10 Oct 2008 at 12:28 AM
Ryan, you've done an excellent job of putting a human face on something that would otherwise be a faceless statistic. Powerful stuff.
Posted by dale brown on Fri 10 Oct 2008 at 08:39 AM
Come on now. They signed the house purchase documents and didn't know they had an ARM rate? I find this very difficult to believe. Mind you, these were not novice home-buyers, and had been through the process once before. I have had enough of the unscrupulous mortgage brokers story. The truth is there were willing buyers who took advantage of the system. Sure, they say now they were bilked. But as anyone who goes through a settlement knows, everything is explained in excrutiating detail, and homebuyers sign papers showing they were told in detail what they were getting into, and what the consequences were.
Posted by ed on Fri 10 Oct 2008 at 10:55 AM
Ryan,
You're an elitist, just like your Republican parents, who voted against the interests of the poor because they assumed that the unfortunate deserved their lot in life.
How many business reporters know or understand the plight of lifelong renters, some of whom paid their bills faithfully for years and then got evicted during the boom to make way for condo conversion? Did you care about that? No. All compassion is reserved for the ownership society.
You describe losing a home as utter defeat. What does it mean to never own a home?
The bias of the media is so obvious: The homeowners are the good, honest souls who weep at the prospect of using food stamps. But renters? They're just scum who never worked a day in their life, yet somehow manage to pay taxes that will protect the interests of the poor, saintly homeowners.
Posted by mary on Fri 10 Oct 2008 at 01:28 PM
Not sure I agree with all your premises, especially that few business reporters have interviewed and/or know people who've gone through foreclosures. However, I think you did a nice job of using a first-person account to humanize a national dilemma.
Posted by Michelle Rafter on Fri 10 Oct 2008 at 04:00 PM
Ryan, I'm also a journalist, and I also went through a foreclosure as a teen. My sister has told me to get over it, it wasn't my fault, it was my parents fault, but its not something you get over. As you said, it colors your perception for the rest of your life. It's good to know that I wasn't the only one.
Posted by darleene on Fri 10 Oct 2008 at 05:02 PM
It's a touching story, but I'm afraid it has little to do with current reality.
Near me, in Phoenix, Ariz., many people lost their homes because they couldn't afford the McMansions they were picking up on ARMs and fled places like Buckeye and Maricopa, leaving them ghost towns. But first they stripped out the appliances and chandeliers.
Then there's the people who bought up homes in hopes of selling them at inflated prices.
When I went to go buy a home last year, the realtor showed me a place that was 40 percent more than it had cost in 2006. It was a shack with a leaky roof and it sat next door to a home for convicted child molesters. 2006: $135K. 2007: $195K.
Now I agree with you, reporters should be talking to these foreclosed homeowners. The problem is, will they tell the truth about how they got into the situation they're in?
I doubt it.
Posted by Marizco on Fri 10 Oct 2008 at 11:00 PM
Great story. Reminds me of my childhood after my parents got divorced. We live in the best country in the world, but we need to learn from our mistakes to keep this housing mess from happening ever again.
Posted by Corey on Sat 11 Oct 2008 at 09:37 AM
I realize I should not even engage in this, but I have to say: Ryan Chittum is the last person on the planet you could ever call an elitist. And his parents are good, honest, hardworking people. There's no need to stoop to namecalling here.
Posted by Sarah Brown on Sat 11 Oct 2008 at 06:08 PM
If you don't want to risk losing your home, then be responsible!
Put enough down so that you can refinance in heartbeat if you need to (if you don't have enough to put down... then save money until you do)
Buy life, disability and mortgage insurance so that in case you become disabled or die (both entirely foreseeable circumstances), your wife and kids don't end up on the street because of your poor decisions. This isn't rocket science, here.
If you have a temporary stretch of bad luck resulting in a mortgage arrearage, file a Chapter 13 bankruptcy and save your home (that's what a Chapter 13 is for, after all).
Frankly, if a buyer is too irresponsible to make sure that the mortgage gets paid in the event of bad luck, then he or she shouldn't get a mortgage in the first place. Such people should rent.
Bailing out people who make poor decisions by paying their defaulted mortgages with public funds is sheer stupidity. Such a policy will only produce more bad decisions.
Posted by padikiller on Sat 11 Oct 2008 at 06:48 PM
Nice story, but you only presented part of it. What other choices did your parents have while they had lower payments? What was the housing market like? What was the house like? Did they do, as I've seen many do, keep hanging on and hanging on, hoping for some kind of miracle to suddenly give them more money than your dad had made before he got sick?
Maybe not, but I'll bet they did, I've seen it too many times.
FYI, I haven't done a big study, but locally, foreclosures are up. A few weeks ago, banks were taking any kind of payment to avoid foreclosure proceedings (source: bank employees from three local branches). It was too expensive in the wake of the Fannie/Freddie collapse to maintain the properties as they would have had to if they did. (same source).
Now, ever since the bailout, I know four people about to lose their homes. Suddenly, the banks who were working with them (amusingly enough, the problem, besides perhaps overextention, was job losses due to government regulations) decided it was pay up within the week all the overdue balance plus penalties or foreclosure proceedings would start immediately. Amazing coincidence there, isn't it?
Let us sum up:
1) Warren Buffet is going to get paid back his five billion dollar loan. With interest. By us.
2) Foreclosures are going to go up since now they can be dumped on the taxpayers.
3) This doesn't help anyone keep their home.
Posted by kamatu on Sun 12 Oct 2008 at 08:14 AM
Ryan,
Thanks for this. Unfortunately, it seems like most of your commenters are in the same camp as the journalists: never been foreclosed. So they don't see how: (1) even with 10-20% down, your house can decrease in value enough that you owe more than it's worth [my case] (2) very smart people can get straight-up lied to by mortgage brokers and put into an ARM [even if you're a lawyer, understanding the fine print can be incredibly difficult] (3) You don't think it will happen to you until it does.
De-regulation was the problem. The question is whether it will be fixed in the future or if homebuyers will be left to swim with the sharks.
Posted by j.william on Sun 12 Oct 2008 at 09:39 PM
De-regulation was NOT the problem.
The problem was poor regulation. That's why taxpayers are on the hook (as McCain feared two years ago they would be) for Fannie and Freddie.
Buying a house is not rocket science. If you finance it, you have the duty to make sure that you can afford the payments in a worst-case scenario. If you're lending, you have the duty to make sure that your borrower can pay and that the equity is sufficient to secure the loan.
This crisis isn't the result of greed and stupidity on Wall Street. It's a result of greed and stupidity on Main Street. Homebuyers and local lenders were convinced that free money was falling from the sky in the form of never-ending appreciation, so they signed a bunch of stupid loan agreements.
You can't blame Wall Street for trying to figure out how to make money off of this kind of stupidity through derivative instruments. That's what Wall Street does- it sells paper.
Of course, the Wall Street boys will benefit most (as they always do) from a taxpayer bailout, and also, of course, it is unquestionably sheer stupidity to bail anyone out at all. Stupidity should not be rewarded.
But let's put the blame where it belongs here. It belongs with the morons who signed the subprime mortgages. If it is "incredibly difficult" to read the "fine print" on a mortgage... the don't sign it,!
Again, it isn't rocket science. Take some personal responsibility and suck it up.
Posted by padikiller on Mon 13 Oct 2008 at 10:25 AM
"I’ll bet that very few, if any, business reporters working today at major media outlets have personally been through a foreclosure. I’d bet very few business reporters know anyone who has been through a foreclosure or is on the brink."
I appreciate Ryan's honesty in writing this piece. And as a journalist working in South Florida -- which has been a flipper's paradise, home to some of the most predatory lenders in the nation and, now, has one of its worst housing markets (surprise, surprise) -- I see both sides, as posters here have presented them.
But its above statement that I had to comment on: that most reporters (I'll broaden that category, rather than make it just "business reporters") don't know of anyone that has been through foreclosure.
I know quite a few. One of them was my co-worker, another reporter who is a single parent with two children. Given what is happening to our industry, the layoffs and salary freezes, I expect there will be some more before its over. Someone who attends my church was laid off from his job earlier this year and, in this economy here, can't find another. Now he is sleeping in his car or crashing, from time to time, with other church members.
So while foreclosure hasn't come to my doorstep yet -- and I have hope it won't, as I own a very modest house with a conventional mortgage -- it can come to any of us. And it's happening all around me.
Posted by Frannymom on Tue 14 Oct 2008 at 06:18 PM
ryan, i can relate to your father's heartbreak at loosing the first home. i had worked from the age of 18, i graduated high school on a friday evening and started work on the next monday morning.i worked until i suffered a worker's comp injury when i was 45 .the injury came two months after we had purchased a home and left me unable to work any more.we called the mortgage company to tell them we had to use the disability insurance on the loan and to our surprize - no life or disability insurance on the loan. we filed a chapter 13 using my wife's income to try and save the house and car until my social disability and worker's comp was settled. the chapter 13 was a nightmare from the start to the end. it took a year for the s/s to start ,3/4s of the backpay was used to try and pay on the house as the 13 paid the bs not the house.with my income cut in 1/4 i had to pay the mortgage and everytime a big expense would come up we would fall behind on the mortgage.the worker's comp finally settled almost 4 years later of which 1/4 of it went on the mortgage. we have come close to loosing the house more times than i can remember. but somehow we struggle enough to get caught back up.its been like this for 7 years and it is getting old.we can't refi because our credit took a big hit when i lost my job.as a father it does something to you you lose faith in the system that let you fall through the cracks.the government doesn't care, the loan company doesn't care,the states do not care and the county and city could care less.sure they will give you food stamps if your go beg them.but as for the electric,water,gas, and loan company pay or it gets turned off and pay or get out.there should be a law against selling a car or home without life/disability insurance on them.there are not any now and alot of homeowner's lose their homes because of this.this bs that the government came up with will only benefit the banks not the homeowner's that truly need someone to lend a hand up.and be very proud of your parents it was not their fault they lost the home. if it was like when we were signing the papers to our house too many papers to read at one time. good luck.
Posted by rockwood84 on Fri 17 Oct 2008 at 03:04 PM
This is insane. This story is sad and I know the exact feeling. We owned a great business! Unfortunately, and because of this terrible economy people stopped spending their money! First, my husand played the bankruptcy game, next it was me...then..we lost our home. Mu husband had never missed a day of work. He has been working since he was a young child. I can't imagine anyone doing this on purpose. Some of you make this sound as though people do this on purpose. We are now renting and have been evicted. We have nowhere to go. We have 5 amazing children and we used to be what I would call "well off." We even moved out of town for an excellent job. My husband was hospitalized and lost his job. HELL to all the insatiable banks. Shame on you. The feeling is awful and I would never wish this on anyuone. So now what? No buying...no rentinng...should we live in our car until it is repo'd? This is not our fault. All of the blammers should really take a few minutes away from their desk, put your drinks down--think of it---it could be you.
Posted by slandhand on Sat 25 Oct 2008 at 12:44 AM
I have personal experience in this. I lost my home and sold it right before a foreclosure. I got into an arm. I was not notified of the arm until we were at the closing; so to say that the mortgage broker was on the up and up is not true. However, I was able to get the mortgage re-financed at a straight rate. Unfortunately, I was going through a divorce, and I was the only party on the mortgage. My ex-wife, in order to hurt me, refused to allow a refinance. Plus and she refused to allow me to sell the home!
So my mortgage doubled, and as that happened, all the money I had was locked up under court order. My book business, which needed about five thousand dollars in capital to replace some inventory, was not able to tap any of the money. Nor could I get a loan from a bank (believe me, I tried!), because they said I was in a divorce and it was not clear owned the business. They were right! So the business collapsed.
I was able to pay the huge mortgage out of the pool of money, because it was a joint asset. Then my lawyer, without any discussion, took the remaining tens of thousands of the money in escrow, to pay for legal fees in the divorce. I went to the Board of Bar Overseers, and they encouraged me to press forward. However I realized I already had a huge series of fights, and I couldn’t take on another one. I thought that if I fight my own lawyer in court as he is defending me, it would be difficult!
So my business collapsed, my mortgage jumped to an insane rate, my ex-wife and her father, with almost unlimited funding from him, flooded me with dozens and dozens and dozens of court motions, hearings and delays, which cost me and my parents over a hundred thousand dollars in legal fees to defend. We didn’t one single motion in that time. And the house went into foreclosure.
It was only when I demonstrated to my ex-wife that she would be responsible for one half of all the net owed if the house was lost and not sold that I was actually allowed to sell the house. However, because she refused for so long, I had to sell the house at a fire sale. But I sold it nonetheless!
My credit was thoroughly demolished. I lost almost every asset in the divorce. But I am happy, as I have my health and good humor and forgiveness. I fired my lawyer after the divorce ended, but the damage was done. A waste-land.
However, life goes on. Just a week ago, my ex-wife hugged me, telling me what a great guy I am. Weird. And the weirder thing is that I didn’t feel anything – just glad that Hell is over. I’m just happy to move on. Life goes on.
In such a situation, there is no room for anger, because anger will eat you up.
However if I ever have time and funds again, I will support any candidate that works toward divorce reform, so one party cannot needlessly drag on a divorce for many years and bankrupt the other party. I will support any candidate that seeks more controls on lawyers, so that potential penalties for vacuuming a client’s money out of their account is stiff enough to make the possibility of lawyer theft remote. As far as the mortgage industry goes, it has done itself in, so I can sit back and watch that one.
Posted by Doug on Thu 30 Oct 2008 at 01:17 PM
thanks, ryan, for your story. I'm a single mother losing my home after ten years (conventional mortgage, 7% interest, 20 percent down) due to job loss and the lack of jobs in this economy. I was scouring the Internet before everything gets shut-off to see what effect this might be having on my 15 year old daughter. I already know what affect it's having on me.
Thank you for sharing your story.
Posted by Anne on Thu 18 Dec 2008 at 09:31 AM
My thoughts are with you and your family, Anne (and others here). I hope things get better for you very soon.
Posted by Ryan Chittum on Wed 31 Dec 2008 at 01:32 AM
My husband and I recently both lost our jobs due to the economic situation. Both of our vehicles have been repossessed but we are managing to hang onto our house by a thread. How much longer we can hang on to our house we don't know.
My prayers go out to all of the many Americans who are struggling to keep their families afloat and survive this terrible crisis.
God Bless all of you and thank you Ryan for sharing your story with us.
Deb
Posted by Deb in Florida on Wed 14 Jan 2009 at 08:26 PM