The foreclosure crisis hits home, or family to be exact. My uncle recently committed voluntary foreclosure, AKA jingle mail. Unable to pay the mortgage, he sent the keys back to the bank. He wasn’t irresponsible, he didn’t buy more than he could afford or refinance to take out equity. He lost his job.
Actually he was fired, for interviewing somewhere else. The boss found out he was thinking of leaving and made the decision for him. He is well respected in his field and makes great money, but there are limited opportunities. He was living in a rural part of California and bought a nice house during the bubble years. He commuted many miles to his job, because he liked living away from the city. Unfortunately that meant fewer available jobs and fewer buyers when it came time to sell. When he lost his job there weren’t any others within the area. He quickly found a new position, but in another state. He packed up, listed the house for sale and moved to Arizona. Meanwhile, the bottom fell out on California real estate.
Housing prices have collapsed in California, stranding people like my uncle who have to sell despite the market. He didn’t have years of equity to keep him above water and even his 20% downpayment wasn’t enough to save him. The rural area where he lived isn’t a popular vacation or rental market, so his options were limited. After trying to sell the house for many months, he finally gave up. Rather than wait for the inevitable he went ahead and mailed back the keys.
He doesn’t seem angry or bitter about his situation, merely resigned to the inevitable financial damage. He still has a job and will keep marching on, but the loss will follow him for years to come. He bought a house he could afford and lived within his means, he isn’t the poster child for irresponsibility you see portrayed every day. Rather he is one of the unintended victims of this current crisis who never realized the danger they were in.
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4 comments:
I honestly believe that this, or situations that are similar, is far more prevalent than the "bought more than you can afford" scenario. It only become more than you can afford when circumstances change drastically. I wish him all the best - I know what it is like to have the weight of a house you can't sell hanging over his shoulders.
Even honest people struggle with the current crisis but the focus is somehow more on the flippers because those are the ones who everyone can target. Even I have some relatives who are stuck with houses worth half their value. They never did anything risky and to their mind even this wasn't risky. Sigh.
Yikes, bad times all around. I'm glad you uncle found a new job.
Thanks for providing another perspective of why people go into foreclosure. Like anything other crisis, we tend to focus on the "cheaters" and forget that they are not the norm. I'm sorry about what happened to your uncle, but sounds like he's well underway to pick up the pieces.
P.S. Sorry for the lack of comments lately, Miss M. I've been really busy at work.
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