Disaster

Finally…foreclosure

Nearly two years after we stopped paying our mortgage, our foreclosure finally happened. In reviewing the paperwork, it was in the works for 17 months. It only took 4 months for Fannie Mae to give the lender power of attorney, and we got our first foreclosure notice shortly thereafter, but then the process was stopped by our bankruptcy proceedings. After the bankruptcy was discharged, we received foreclosure notices every month or two, but the scheduled sale would never happen. This continued for nearly a year, so I had no reason to believe that the notice we got for a sale on the courthouse steps the first week in October would actually take place.

Last week, though, I got a call from my insurance agent, saying they’d received notice to cancel the homeowner’s policy in January, due to foreclosure. So I did a public records search at our county website, and lo and behold, there was the foreclosure deed – dated two months earlier. Wouldn’t you think the lender would have to send us a letter, saying we no longer own the property? Or at least call? It’s just impolite that they didn’t bother to tell us.

Like many other foreclosures, the lender sold our property to the highest bidder – Fannie Mae – for 18% less than we owed on it. A little more research revealed that the house was then re-sold, for a short-sale price that was a staggering 33% less than auction price. Yes folks, that is 48% less than we owed on it. It’s a damn shame that the lender chose to take this path, rather than work with us on a refi or modification that would have paid them a lot more, and kept us in our beloved home.

Disregarding the fact that we could easily afford the reduced price (grrrr), I can’t see how this is a good financial decision for the lender. I suspect they are so buried in foreclosure paperwork and so unmotivated to do HAMP and other government-regulated loan mods that they are reaching for the quickest, easiest way to unload properties, even if they have to take heavy losses. But it’s a Catch-22: they’d have fewer foreclosures if they did the work on the loan mod/refi side instead, and wouldn’t drag the whole neighborhood down in the process. The banks would have happier customers, with stronger families and communities…and maybe fewer angry 99%-ers out there demonstrating against them.

At any rate, we are now house-free. After all this time, I thought I would feel relieved – and I do, a little bit. It’s good to finally put that phase of our lives behind us, and I am truly happy that we’ve reduced our debt significantly. And renting gives us a good deal of freedom that we wouldn’t have had if we still owned the house. But I also feel a bit sad. Even though we were not to blame for our sudden, unexpected inability to pay the mortgage – and there still are millions of other people in the same situation – the loss of what was intended to be our permanent, forever home still somehow feels like a failure. It was really strange to see pictures of our home in a real estate listing that we didn’t create. Clearly, even now, I still have some emotional attachment to that place, and letting it go will take some time.

 

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