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How I lost my home: 3 case files
Think it can't happen to you? Consider these tales
from real people who faced serious problems -- job loss, illness,
divorce -- that turned their lives upside down.
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Everybody knows about the American dream of home ownership, but what
about the flip side: the nightmare of losing your home?
It's not something that happens only to someone else. Toss into an
average life some devastating medical bills, a sudden job loss, an
overambitious home purchase or rising interest rates, and pretty soon a
house that took years of toil to purchase is auctioned away in seconds.
We talked to three people or couples who saw their home slip from
them. Each agreed to share their story in the hope of sparing others the
same pain.
A great life . . . and then, divorce
Life happened fast for Kerry and his wife.
In just five months starting in late 2003, Kerry, a computer
technician for a nationwide bank, got married and bought a house in St.
Paul, Minn. His wife gave birth to a baby boy. The next summer they dove
into a complete remodel of the two-story home built in 1911 that they'd
bought for $129,000. With the help of professional friends, they began
to tear out walls, remodel bathrooms and replace windows. And Kerry's
wife, who worked for a local college, started graduate school.
Despite the zaniness, life was pretty good and the couple was
financially stable, says Kerry, who asked that his last name not be
used. They had an annual income of $105,000.
Everything changed in December 2005. After just two-and-a-half years
of marriage, "she came to me and said she wanted a divorce. It kind of
threw me for a loop," says Kerry, now 33.
Kerry's grief soon was compounded by financial trouble.
The couple had bought the house together for well under market value,
but in order to fix it up, they had refinanced to withdraw some of the
equity. Kerry's credit was much stronger, he says, so the couple
refinanced for $145,000 in his name alone. "I didn't even think twice
about it. We'd given our word to each other that we were together for
the rest or our lives." Similarly, he says, because he had better
credit, other bills -- credit cards, auto loans -- were solely in his
name.
"She moved out and washed her hands of everything," he says. "She
left me with 40% of the household income and 100% of the household
debt."
Unable to handle the $1,089 monthly mortgage, Kerry put the home on
the market in April 2006. The timing wasn't good. "In my neighborhood in
St. Paul, that week I put my home on the market, in a five-block radius
there were 13 homes for sale."
Worse, Kerry's home was only halfway remodeled. "Most of the material
was already purchased," he says, but "anybody who wanted to buy a house
immediately knew they would have to put a lot of time into it."
Unwilling to miss any child-support payments, Kerry began to slip on
his mortgage. He called his lender, Wells Fargo. But with his reduced
income, the options the bank offered didn't help. "They couldn't get me
a payment at which I could live." And still, the house didn't sell.
In the span of just eight months, Kerry saw his life go from
wonderful to disastrous. "I was really overwhelmed," he says. "It got to
the point in June where I started seeing a therapist" and started taking
antidepressants, he says.
In July, Kerry received a foreclosure letter. In September, Wells
Fargo bought back his house at auction for $157,000 -- $10,000 more than
he owed on the mortgage. He's still not sure how that works. "I don't
get to see any of it," he says. He'll be evicted in March, with only his
possessions. (The difference between the paid auction price and the
amount owed is often used toward the costs of the foreclosure, along
with any fines and late fees, says Rick Sharga, vice president of
marketing at foreclosure listings company
RealtyTrac).
Sadly, Kerry will take something else with him, too: a notice on his
credit report that Wells Fargo officially foreclosed on his home. "In
December 2005, I had pulled my credit report . . . and I was 738 (out of
800). That's really good. When I ran my credit report a few months ago I
was at a 580. It's only gone down since then.”
But there is almost a strange relief to the eviction, as Kerry sees
it. "It closes a bad chapter in my life."
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