THEY SHAMED US
May 26, 2011: When our house went under water, when we lost the equity in our home, we couldn’t sleep. We could never sleep again so long as we owned an underwater house. Like a functioning addict, we could never be truly happy until our house was gone.
The most important thing to remember when facing negative equity is that you are not alone and we are long past the point of needing to feel shame. Today’s economic environment and housing market are some of the worst in in world history and hardly a single individual cannot name someone they know going through financial stress. No matter how tough things are, your health should never be compromised due to a debt that is beyond your control. Here are some of the best things you can do to cope with the stress of a foreclosure:
Consult Proper Counsel
You need to shift your energy by learning about your options and your rights. Banks have no obligation to do anything for you but the right counsel can advise you of your rights and play a big role in helping you sleep at night.
It’s Not Your Fault
There is a lot of debate on this but there are dozens of reasons why you may be facing foreclosure and many of these reasons are beyond your control. From a mortgage you never understood to a forced move with an upside down mortgage, sometimes it’s just a matter of bad timing. While losing your house is a personal thing nobody else really cares about your personal situation so you need to take the steps to protect your own finances and provide for your family in the best way possible.
Think Long Term
If you are 50 percent upside down on your house do you really think you will ever have equity again? Why not consult with a lawyer and consider a strategic default or short sale weighing your options about having a home which may actually have future equity in it. Many consumers still think about how to simply pay next month’s mortgage instead of focusing on the big picture.
Reduce other Financial Stress
Most people who are going through a short sale are not doing so by choice which means you need to save money on all your bills. Shop around for savings on regular bills and use comparison shopping to find cheap car insurance, tips on how to save money and package deals on items such as cable and internet. If foreclosure was not planned then it’s important to get your financial house in order.
Talk about It
Financial stress can kill a marriage and your social life. When it comes to real estate a discussion about personal finances is not as taboo as it once was. Consumers simply have no love for banks anymore and defaulting on a mortgage is not this social scar you may think it is. Not only will talking about it help but you will be surprised how many people are actually going through the same situation and you may even learn some helpful advice.
Move On
Once you have weighed all the pros and cons of foreclosure let the system work and with the right counsel it will probably be quite some time before you have to call a moving company. Focus your energy on getting your finances back on track and leave the stress of dealing with un-cooperative banks to a lawyer.
There is no doubt that losing a home is a stressful process but there are many options a foreclosure attorney can assist you with to make life less stressful and reduce the economic impact to your family. Never feel like you are alone, odds are someone on your street is going through the same thing.
Recovery
Recovery involves rebuilding self-esteem. Regardless of whose fault you think it was, feelings of self- worth are at an all-time low. The many changes that have and are taking place force you to develop new areas of yourself quickly as a means of survival. Low self-worth–feeling inadequate and undesirable–can make it hard for you to function. But if you can face and rise to each challenge as it occurs, slowly but surely you will rebuild your sense of competence as a person and learn to trust that the person you are becoming can be relied on to come through.
I own an underwater condo in Las Vegas with two mortgages (80/20). I bought the condo in late 2005 for $168,000 and a few years later I got married (which turned out to be a brilliant financial move). After 5+ years, I still owe roughly 125K on Mortgage 1 and about $30K on Mortgage 2. Thanks to my wife’s income and our ability to pay off other debt like our cars and credit cards (both currently $0) We’ve been able to add a little extra to the Mortgage bills every month (roughly $100 to the first and $50 to the 2nd) and we’ve saved up enough to get to a point where we are seriously considering just paying off the second mortgage (we’d still have $10K+ leftover in savings). I’ve explored loan mods in the past, and have always been told the 2nd mortgage is a problem — and also my combined income may be a problem. It doesn’t help that my Loan agency (Litton) doesn’t have a a good track record with loan mods anyway. I guess I’m wondering if you can offer any advice on whether or not a loan mod is more likely after the 2nd mortgage is paid off. Or is it just a mistake to pay off the 2nd mortgage and better to just walk away with that money in the bank since the mortgages are in my name only and the money in hers?
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