What about us??? One woman's plea for help

Posted by: Peter Coy on August 30, 2007

boer house.bmp

This is the California home that Sheila Boer, single mother of five, fears she may soon lose. She wrote a letter to BusinessWeek’s Dawn Kopecki after reading Dawn’s online story about solutions to the mortgage mess. Separately, Sheila told us that she used to earn good money in the mortgage business but lost four jobs this year alone as one lender after another went under. She gave us permission to publish her letter, along with the photo of her house, on our Hot Property blog. We’re not printing this letter because we agree with it …

or because we disagree with it, but because it raises a lot of important issues about what has gone wrong and what can be done. Here's Sheila:

What about us??? I am one of over 88,792+ people that have lost their jobs due to the “Sub prime mortgage crisis”. Everyone from Title Officers to Lender Account Executives have been laid off. I have been employed in the California mortgage industry for 19 yrs. This is the only line of work I know and my families sole support. In all my years helping borrowers purchase or refinance I never once closed an Option ARM/Pick A Pay loan which I feel is a big reason for the sub prime fall out. Now I like many others have been pushed out of my job and am now facing losing my home that I have worked so hard to obtain. What about the families that are being affected by the mass layoffs? The children that are being uprooted by foreclosures and families falling apart? What can the Fed or the government do to help us now? I don't believe they are concerned about the individual homeowners. They are concerned about the big Banks ,Lenders and Investors. At this time I can't even take out a second mortgage on my home to help pay off some of the credit cards I have been forced to live on because I am employed (was) in the mortgage industry. I can't sell my home because half of California is for sale. Last year I had $250,000 in equity and now I wouldn't‘ break even!!! Do I walk away and give up like so many are doing ?? 1 in every 31 homes in Modesto, CA is currently in foreclosure and 1 in every 27 in Stockton, CA. This is an epidemic which has created mass hysteria amongst investors. What do I tell my children? Where do we go? I have spent all these years working paying taxes doing the right thing raising my children living the American dream and for what to lose it all in a matter of months. I am a single parent of five children two of which are in college and now I am unable to pay my mortgage, my bills, college tuition and just the basic everyday needs. I am faced with losing everything and have no agency or group to turn to. The bankruptcy courts are overwhelmed. Every day I hear another heart wrenching story from someone losing their home from every walk of life from the poor to the rich this crosses all lines. I am only one individual there are thousands just like me nationwide. What can be done about this? Someone has to have the answer. Can we form a an agency to help keep borrowers in their homes? Should the Government purchase these ailing loans and restructure them so that the homeowner has a chance to hang on? Most loans in Ca are over the conforming $417K so any Fannie Mae agency will not help. Will anyone listen, does anyone even care? Are you familiar with the web site www.mortgageimplode.com? I have had the opportunity to be employed with a company that ended up on the imploded list and they failed to pay my wages earned from the prior month before they closed. This in turn started a domino affect in my finances which has made it very hard to hang on. I believe that an article should be printed to shed some light and put a face to the people that are battling this situation every day.

Reader Comments

dave albright

August 31, 2007 11:11 PM

I would love to think that the mortgage Sheila can't afford to pay is "purchase money financing", meaning, the original loan she used to buy the home. In most cases these poor homeowners have used their homes to consolidate excessive credit card debt. In many cases more than one time since originally acquiring the home. The spending habits of the American consumer and the lending guidelines of, not the mortgage lender, so much as the Credit Card companies who extend credit equal to 1 year gross income of the consumer is the catalyst of this debacle. The position most of these people are in is a result of irresponsible management of finances. We do not have the booming real estate market to cover up the negligent lending guidelines of the credit card companies and the glutenous spending habits of the American consumer. I too agree that the mortgage lenders irresponsibly loosened lending guidelines to increase their volume and profits. Really, the majority of these home owners have $25K conservatively and upwards of $100k of unsecured debt and cash wrapped up in their mortgages from previous refinances that created the position they are in now. Maybe they should have held off on the $2,500 barbecue they charged on their visa, they would be able to make their mortgage payment this month. I know it sounds extreme, and not all cases are this way, I would argue that most are.

Lord

September 3, 2007 3:03 PM

I would have to say, - What makes you any different from any of a thousand other displaced people, from all industries and walks of life, that have to adjust to changing times? Did you think that recessions were only for the other guy? That no rain would ever darken your life? What steps did you take to prepare for this? The writing has been on the wall for at least the last three years as the Fed started raising rates. Were you too busy to read it? What happened to all the money you made? Did you really think it was going to last forever?

Susan

September 4, 2007 12:48 PM

The milk of human kindness just overflows, doesn't it? I agree that it would be ideal for everyone to have enough "rainy day" savings to tide over a family for at least 6 months, and to have easily manageable credit card debt. I'm fortunate to be in that situation now, but sure haven't always been. My heart goes out to families trying to hack it - not always perfectly, but the best they know how at the time. Since the government seems to have little problem handing out money to people in this country illegally, surely it can help provide a hand up out of trouble for those US citizens who have worked hard and find themselves floating under the safety nets.

sheila

September 4, 2007 7:34 PM

Response to Dave & Lord:

I had savings that held me over now for several months. It only goes so far. You must not have children in college, at home and been forced out of your line of work. It is easy to judge someone without really knowing them or all the details of their situation. This is just one issue going on in our country right now. What would happen if you or a loved one had severe medical problems - have you checked into your insurance lately. I had a family memeber during the past several months that had a medical situation and I was paying over $837 a mnth for my medical insurance and the employer that failed to pay me also failed to pay my medical insurance even though they took it out of my paycheck. By the way my BBQs are always Potluck!

Irv

September 5, 2007 3:18 AM

Perhaps if the lenders would take the houses back and agree to rent them to the former owners for a specified period of time untill things turned around, a tragedy like this could be avoided.

Karyl

September 5, 2007 7:03 PM

I am presently in a very dismal situation with my mortgage and could quite likely lose my house that I too worked so hard to get.
The difference: I let myself be dazzled into the prospect of home ownership and the American Dream. I was not educated enough on the whole lending scenario and believed my lender would answer my questions honestly. They did not. So while I'm trying to make an educated decision, the answers I was receiving were all directed to my starry eyed vision of owning my own house.
The government does not owe me a "bail out". But what they do owe everyone is monitoring of lenders practices.
I do have one question if someone could explain to me: Do lenders, who arranged these ARM loans, have the option to not raise your rates? If that option exists, why wouldn't they opt for no raise rather than forclosing?
I'm trying to find some sort of rational step to take and really would like to get an honest answer (and, NO, that honest answer will not be provided by my lender).

Brian R.

September 5, 2007 8:32 PM

Ms. Boer, my mother, single-handedly, raised five children. I am sorry about your situation. However, there are worse things in life than losing one's home. (In the time it takes to read this sentence, each of us could think of many such worse situations.) If you despair, your children will, likewise, despair. Take another job promptly, even if it will not pay close to what you were earning in the mortgage field. And by no means should you expect that the government will assist. By the way, I, too, have worked in the real estate industry for many years. My income this year is about one-third (literally) what I had been earning. It's unpleasant, but I will survive, just as you and your children will.

Mr. Frugal

September 6, 2007 5:05 PM

I am 35 and single. I work on Wall Street and I made $350K last year. I live in a 400 sq ft 5th floor walk-up studio that I rent for $1,400 a month. Ms. Boer, your house is like the Taj Mahal compared to mine. My whole apartment may not even be as large as your guest bedroom. Could I afford a home like yours with my current income? You bet... only if I assume I could continue to keep my job and earn the same level of income for the rest of my life. So I chose to live in a studio and take public transportation to work. I live a simple, frugal life because I believe in such a silly thing called personal financial responsibility. I know it's pure lunacy to expect that my fortune will always be as good as it has been over the last few years. I know I always have to save and plan for the bad time ahead. I know we live in a era of ultra-competitive global job markets - even people with specialized skills like myself could be doing well one day and losing our jobs the next.

So you made your choice and I made mine. You threw that dice and chose to pursue your so-called American dream and you woke up one day and realized that sometimes dreams are sweet and the real world is, unfortunately, not as nice. The right thing to do is to may be find a studio somewhere, and start from the ground level again. It sucks (I know) but hey, what can you do? No one pointed a gun to your head and forced you to buy that beautiful house, did it? It was your choice. Live with it. Move on. But taking personal responsibility for our mistakes in life is so un-American. It's not your fault, you reminded yourself. You naturally expect people like myself to foot your bill so you can keep your Taj Mahal. You want the government to lower interest rates so you can get your zero-interest mortgage back. To hell with those people with saving accounts earning 0.5%. Why would any respectable Americans save their money anyway? Haven't they heard of the American dream? President Bush want to give you a tax break if you end up in a short sales. My question for President Bush is: What about me - the silly saver? If people like Ms. Boer gets tax breaks for getting free money from the banks, why should I pay taxes on my interest income from the bank? Tax breaks for free money but not for interest income? How do you justify that? Our government policy encourages people to consume - buying things bigger, more expensive, more environmental detrimental than they could neither afford nor need. Is it a surprise that people like Ms. Boer don't save and plan for their financial future? Is it a surprise that we ended up buying so much oil and foreign goods the Saudis and the Chinese are the ones holding on to lots of money that used to be ours before we squandered it away on those extra Barbie dolls or SUVs? So now they have the money and they wait. They are waiting for us to bleed to death and then they will come and buy our assets on the cheap in the name of bailing us out. The more we indulge the like of Ms. Boer, the more we are auctioning off pieces of America's financial future to the foreigners. The one thing that is in most need for a bailout is our sense of personal responsibility and modesty. If American dream is about living large at other people expense, then it's a shallow dream that we could do without.

John

September 7, 2007 8:24 PM

My heart goes out to you. I worked in Silicon Valley for 15 years before anyone ever heard of dot com. After making it up the ladder to Director of International Technical Support with the big wireless Telcos as my customers, one Tuesday, Silicon Valley went silent. I could not find a job for the better part of three years.

Ironically, I ended up taking a "job" (I was not an employee--but a 1099 contractor) for a mortgage company. The lack of ethics was impressive in the business. I made 20% commission at first and eventually got up to 95%. I did not do a huge number of loans. In my best year (I was on there for 2) I only made about 50K. I made zero many months. But even so I could see that people who had been in it for a while and who had a book were rolling in it. Did any of they save? Not many. Even I, a newbie in the biz could see at that time that the ride would come to an abrupt ending. It was an industry full of people living in denial who refused to get a reality check. The velocity of the business was unsustainable.

I wish you the best, but no one was there to help when my income went to zero and I lost almost everything in the stock market. What was left was taken the following April in taxes and I had to take $250K out of my equity to pay income taxes--quite a slap in the face considering all the stock profits were gone. To this day I carry a $600 short-term capital loss forward on my taxes. No bailout for me. Instead I got lots of mail from the IRS.

Best of luck--you will find a way.

b johansson

September 8, 2007 12:50 AM

Dear Ms. Boer,

You have five kids and no money? You remind me of the "Won't you PLEASE HELP?" cries of the Sally Struthers brigade in Bolivia and Nigeria.

I'm 46 years old, and have no kids, and no debt! Why? Because I knew I had no money to properly support those children and that debt.

It's called RESPONSIBILITY. Please do try and take some. Thanks.

John

September 8, 2007 12:35 PM

I agree with Mr. Frugal. I am sorry to read about those in plight due to the mortgage industry collapse, but this was no suprise to anyone related to the industry. I worked in the mortgage loan origination business for two years. I saw it from day one this all coming to ahead by the way everyone was panicking about rates going up and three years ago it was still historically low...at that point it was obvious. Everyone who thought the gravytrain was going to continue was irresponsible and/or ignorant. I left the industry, I was not forced out. I was happy to help many during that time, but I was disgusted at the same time how the customer and the lenders danced all the way to the bank helping eachother take option arm loans out that was too good to be true. While I made a fair income working hard to close loans, I saw way too many makes much more than me with what the lenders were paying their loan consultants or brokers to sell these loans hand over fist. Finally, the options arms, I/O arm loans etc are not dangerous. They are savy loans for a very small portion of the consumer base that realtors, appraisers, banks, brokers, loan consultants, and builders all used together to help fuel the home sales growth with the overall low rates at the time to get everyone & almost anybody they could into a sale. If the person's letter said they did not sell those loans, certainly you knew about them & how everyone was jumping onboard around you. If your whole career was in the banking/mortage industry why did you not see this coming & prepare. I was in it for only two years & saw this & got out while I could.

js

September 8, 2007 10:47 PM

Mr Frugal

Excellent Analysis!!!

I do feel sorry for Ms Boer. However I live in a nice moderate home and save money.

Even though I have a good education I have not earned big money in my career. It does not bother me. I have saved and invested and in most years I now make more than my salary in investment income.

I could afford Ms Boers house... but I dont need it.

I could afford a Mercedes... but I dont need it.

I could create mortgage debt out of credit card debt... but I dont have any CC debt.

I could buy the electronic gadgets that people who work for me purchase... but I dont need them and I am still tech savvy.

I do feel sad for those who regardless of income are unable to design a personal financial plan. They expect help when times get rough.

Perhaps Ms Boer's children will learn a valuable lesson early in life. I hope so. Ms Boer, you are talented. You will do ok but may not be able to retire at 55. If it is my taxes that are increased to finance your living I am not crazy about that!

In conclusion, I should say that I have friends and relatives that have earned 100k - 300k for years. Many are not in my position. Building wealth requires a commitment that most people dont possess. It isnt too late to embrace a fiscally prudent lifestyle. You would benefit from it and your children would benefit a lifetime from it.

In my opinion we are in a century where the US average income will revert toward the mean of the world. It may get harder in the future is my point.

I have always been struck by hearing about relatives who in the 1930s lost everything. They went to the store once per week and bought 3 things, flour, sugar and milk.

I buy alot of things to exist today. But in perspective, many of the things I buy are not needed. My relative would consider me a spendthrift. Most people today would consider me a tightwad.

My relative scrimped and saved to make a better life for her children. To send them to college for the first time. I remain indebted to my great grandparents and grandparents.

Ms Boer I hope you are raising 5 children well. Money is but a small part of doing that. If you were in my town I would be inclined to anonomously mail you a $100 bill. Even though it wouldnt make a difference in your life I do think you would feel better.

Lord

September 10, 2007 11:24 AM

Actually it is from having been in that situation myself where of I speak. I don't mean to be unsympathetic, but if it is sympathy you are looking for, it is a mistake. Only you are in your position and only you can solve your problem, as difficult as that may be.

Originator

September 10, 2007 1:50 PM

Sheila, it is amazing how quickly it ended for so many. I really sympathize with the lose of your earnings and health care never paid for. I too have worked in the industry for over 22 years, only I have been commissioned sales, I receive a small portion of the profits one time 6 weeks after the closing. There is no pension only a 401K to contribute to. I know most people who have been in the industry as long as you and I have seen drastic changes in lending, prices, taxes, everything that effects all people in our country. How will this play out, what is the solution? I don't believe anyone has a simple cure and no government official is going to figure it out. We have given almost everyone the right to own a home under the present administration and at the same time let real estate taxes go rampant, home insurance has risen drastically in many areas, so much so that even if we let people go on paying interest only on their loans they can not afford the other requirements of home ownership. We all wish their was an easier answer then property values will have to fall. Families will have to suffer loses of homes, cars and their standards of living. As we move into a world economy our standards will be sacrificed to compete on the global playing field. We are busy helping our friends in the Mid-East rebuild homes and cities, once that is done and the bills are paid we will once again take care of our own. Good Luck, you have helped many people for many years, you will do well.

Carl

August 26, 2008 8:14 PM

This is horrible. Why are people so cruel?
All the woman wanted to do was get some insight into how to solve the mess she, as well as thousands if not millions of us are in.

Sheila Boer, I do have some advice. Look up Matt 24:3-14. There you will see prophecies as to your plight, as well as why there is such a lack of genuine compassion for others today.

We live in a very selfish, Don't bother me with your problems world.

Zephaniah 2:2-3.....

Love Carl

broken hearted

September 24, 2008 8:52 PM

So sory! I lost my business two years ago. (gas/small repairs) I was forced to close my doors leaving behind $150.00 debt. Now my mortgage is always late, no one will help me to refinance so I can get on my feet again. my credit was always good. not anymore. I have three kids. No more American dreams for this family. We're living off of prayer, day to day daily bread.

ms. lewis

November 8, 2008 9:40 PM

I am a 51 old woman who has zero income after i pay my medical bills and personal needs person which helps me in my home out of pocket expense . I have a sezures disorder,upper and lower back problems,and carpol tunnel in both hanes and ashma i have to have heavy cleaning.and my hair out of face and cleaned everyweek,my house clean on a daily basis. dusting all the time i pay out pcket expenes of 490.00 dollars for thoses services I recived ssi and ss on low amout they give me food stamps because i don't have money. to supplement me for food. i have no money for bills t be payed hardly i am on low income housing 251.00 a month with a total of 651,00 a month i have to pay lights 166.oo a month and buy personal needs to in need of help.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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