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9 News Report on Roxane Webster and My Home Team

9 News experts Roxane Webster and Jake Gienger discuss Foreclosure, Loan Modification and short selling

Who are losing their homes?

Jim is a dental student, married with two young children.  While attending school in Denver he bought a modest starter house, intending to sell when he started his residency after college.  When considering this plan, they did what responsible young people do.  They sought the opinions of parents, friends and financial advisors.  All of advice they received was the same.  “Buy a house.  Don’t take any cash out of it.  With double-digit appreciation you can’t go wrong.  At the end of 4 years, the house alone will have gone a long way toward paying for dental school”.

You learn a lot about the financial habits of your clients when you are a realtor.  You learn even more when you are a realtor working in short sales.  In the time it took for Jim and I to complete the listing documents, Cindy had gathered up all of the financial data that I needed.  This is not a small pile.  Tax returns, bank statements, pay stubs, on and on.  The point is, these are financially organized people.   Not the image that some folks have of a couple losing their house.

The house had lost half of its value in four years.  They bought using a down-payment assistance program that doesn’t allow him to rent the house and they are too honest to cheat.  They can’t stay in the house and weather the storm, hoping for values to return.  To do so would mean postponing Jim’s residency, getting a job in this market and changing the whole planned course for he, his wife and two young children.

They will move, work on rebuilding their credit, and hope that the lending crunch has eased by the time he is ready to open a dental practice.  A couple who had impeccable credit will then have mediocre credit which means a higher interest rate on the loan to open that practice which will increase Jim’s overhead.  That means less money to put into the growth of his business.  Less money put into his personal budget. Less money to put into college funds for his children. They’re smart. They work hard, live within their means and are organized.  Clearly, they will recover from this crisis, but the trajectory of their lives and plans has been forever changed.

Stages of Grief when loosing a home

Loosing a home to Foreclosure or having to do a short sale is a traumatic event.  So is the Bankruptcy that often follows either. My experience is that people in these positions go through the stages of Grief described in the Elizabeth Kubler-Ross  1969 book On Death and Dying.

The traditional stages of grief are Denial, Anger, Bargaining, Depression and Accetpance.  If you add Shame to the mix you have a pretty good discription of a person loosing their home.  As Realtors we need to be sensitive to the fact that our clients are in one of the most traumatic periods of their lives. We also need to be objective if they are behaving in ways that don’t make sense.

I recently had a client who was so mired in anger at her situation that she turned it on me.  I was hurt and stunned by her outburst, and then reminded myself of her situation.  She has seen her career grind to a halt, lost her home, gone through bankruptcy, and is now a single woman in her fifties living with family and attempting to start over with no obvious path for doing so.  Her anger isn’t about me and never was.  It is about fear.  She is terrified and has every right to be so.

We are taught to show our best side to people, to be good members of society and to play by the rules.  Many of the people loosing their houses feel cheated.  They have tried to modify their loans and been mis-led about their chances of being able to do so.  They have been swindled by companies that offer them help, take their money and disappear.  Advisers give them conflicting information and the government programs are confusing and largely ineffective.

The best we can do is to try to understand the greif our clients are experiencing and be gentle with one another.