I have been pretty open with my readers about how desperate our financial situation is right now. We are delinquent on our mortgage, suffocating under the crush of medical bills and still trying to keep our heads above water. Over the past few days, Brian has encouraged me to share with my readers that we can't afford to live anywhere.
It's not simply that we can't afford the house in which we currently reside. We can't, but it's more than that. Not living with margins means we have no savings right now. We would not be able to come up with a downpayment on a new house. We wouldn't have the money to put the first and last month's rent down on a rental, nor would we have enough to pay movers to move us into said rental.
Even more, rental prices right now are bloated. People need to cover their mortgage payments, but their mortgage payments are based on their house being worth something that it isn't anymore. The banks are not willing to deal, head-on, with this fact. What ends up happening is that everyone is paying more for their home than it will be worth for many years to come.
I am terrified at the prospect of having no place to go. I wish that I had an answer that was reasonable. The thought that's been taking up rent is that we could rent a one-bedroom and live there, as a family, until things could turn around. Although, now that I'm typing that, I'm not sure a landlord would rent a one-bedroom apartment to a family of 5 with 2 dogs.
Today, though, we received some good news. There is a program called Illinois Hardest Hit. It's for homeowners like us, who have been hammered by a substantial loss of income. (Not long after we moved into our house, Brian's salary was slashed by 30%. The rest of our bills remained the same and there was little we could do to maneuver ourselves, seeing as we had just bought our house. We never were able to refinance because we never had equity in our home to speak of.)
We had applied for relief through this program last year. We had to prepare a 60-page document detailing our financial situation. It was overwhelming and invasive. If accepted into the program, we would either be brought current (we were at the time) or we would receive monthly monies that would allow us to continue to pay our mortgage.
In a peculiar twist of fate, we were denied because we did not reaffirm our mortgage commitment when we filed for bankruptcy. Let me explain. At the time we decided to file for bankruptcy, we owed Wells Fargo a sum of money--let's say $7K. We did not have any way to pay them back that money. We had been accepted into the Home Affordable Program that adjusted our mortgage amount. We were told that, once formally accepted, Wells Fargo would roll the money we owed into the total amount of the mortgage and extend the loan out. They did not do that. When we called to see when it would be done, the Wells Fargo that had originally issued the mortgage had no idea that we had been accepted into the Home Affordable program.
The Wells Fargo that was working with us through Home Affordable couldn't (or wouldn't) communicate with the other part of Wells Fargo. There was no recourse. We were just as confused as I'm sure you are. I had no way of getting the two parts of Wells Fargo to talk to one another.
Now, when we filed bankruptcy, we had two options when it came to our mortgage. We could reaffirm. This would mean we acknowledged that we wanted to continue to live in our house. We wanted to try to make some kind of restitution to Wells Fargo for the money we owed them. They could come after us for that money and start the foreclosure process. If we eventually walked away from the property, we would continue to owe them the money.
We could also not reaffirm. This would mean that, technically, we were no longer considered homeowners. Wells Fargo would not be able to come after us for that money and if we walked away, we would be free and clear. All things considered, we didn't reaffirm. We didn't have the money they wanted and with Doug coming in just a few months (we filed for bankruptcy in April 2011, he was due in July 2011), we knew we wouldn't have the money.
Of course, the even more peculiar twist of fate is that it cost us $3000 to file for bankruptcy. I had to cash out the remaining money of the 401k I had from working at Hewitt Associates just to file. The rest of the money from the 401k was eaten up by medical bills and miscellaneous expenses. Jeremy was hospitalized in March 2011 just after Brian's insurance had changed. It used to cover us at 100% after we met a family deductible; the new insurance covers us at 80% once we've met a much more substantial deductible. This still has us holding the bag for a portion of any bill we have. Our computer broke and now we were looking at having to pay much more just for having Doug.
All of those things being considered, it was a no-brainer to not reaffirm. So last fall, when we first heard about the Hardest Hit program, we were ecstatic. We filled out the 60-page document they required and submitted it. At that point in time, we were still current on our modified mortgage amount. We were really scraping to make it. The help from this program would have allowed us to have some margins. They came back and said we couldn't be considered homeowners because we didn't reaffirm the mortgage. (Even though we would have been forced into foreclosure for owing Wells Fargo money and then really wouldn't have been homeowners. There's no telling that, if we did reaffirm, that Wells Fargo would have ever resolved the issue with the outstanding money. Owing to the fact that they have shut a shitty track record with dealing with us, I felt pretty confident they wouldn't.)
We were also rejected because Brian (on paper) makes too much money. It's this crazy thing I don't think people understand. In order to benefit from social/government assistance, one has to be making a ridiculously small amount of money. Like $20K a year, something that small. If we were making that little a year, then it wouldn't even be a question of keeping the house. It's really quite appalling. We're supposedly making all this money, but it's being eaten up by health expenses.
Then, at the beginning of this year Brian had to have surgery. We chose to do the surgery over paying the mortgage. We fell behind again. And it's been getting darker and darker; yes, he has been making a bit more money, but any extra money we make is being eaten up by health expenses. He is driving a car with 180K miles on it. We are, really, just barely making it. We are not in a position to pay to live anywhere.
So here we are. Wells Fargo has been giving us deadlines to become current with our mortgage or face foreclosure. It started in July and every month, they've given us one more month to come up with the money. We really didn't know what was going to happen. I have a faith in God, but honestly, we've been pummeled so hard and for so long that I couldn't imagine that God was even keeping tabs on us.
We called again this weekend, after receiving another month from Wells Fargo. They referred us to Nicole, a woman we worked with when going bankrupt. There were classes we had to take in order to go bankrupt (that also cost money and for which we could not receive assistance to pay); we took them at her office.
The long and the short of it? Illinois Hardest Hit decided that the parameters they set were too narrow. There were other people in our same predicament and it wasn't helping enough people. So we re-submitted our information to Nicole. We received news today that while we still make too much money to have monthly help, it looks like they will be able to pay to get our mortgage current.
It's huge news. I am a firm believer in waiting to see it to bank on it, but if it really happens, that's a tremendous help. It gets Wells Fargo off of our backs for a while, gives the economy a chance to continue to heal and hopefully gives Brian a chance to either start making more money at his current job or find a job with better benefits or better pay. I wish I could say I am jumping up and down, but I'm not. I'm still cautiously pessimistic.
As a final note, this program was brought to us by Democrats. I'm not saying that should sway your vote, but keep in mind that we are being helped by Democrats, not Republicans. If it were up to Republicans, we would have been kicked out a while ago. Just saying.
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