The Other Victims of the Mortgage Meltdown

My name is Michael Jayne and I am a 100% non-service connected disabled veteran. When my son Max graduated from high school last year with decent grades, his hope at the time was to work and earn enough to go to the Stillpoint School of Massage Therapy, a nationally recognized program offered at Greenfield Community College. As soon as he graduated he got a job in construction doing roofing. Since he was very physically strong, intelligent, and a quick learner, he worked his way up to $15/hour within two months of starting.

It looked like his plan would work until the real estate bubble popped and housing construction as an industry ceased to exist. He now is competing with every other unemployed 19 year-old chasing after minimum wage jobs that, if found, are not quite enough to survive on, never mind saving up for school. His situation has deteriorated to the point that all of his savings are gone and he had to move in with me.

This is a huge risk for the both of us because I live in a subsidized 1-bedroom apartment and I cannot legally add him to my lease. If I lose my non-transferable Section-8, we both become homeless without options. My son might be able to couch-surf for a while but with my disabilities (lower back spinal cord injury, six 3″ screws hold my back together) the thought of homelessness scares the hell out of me. Since he hasn’t been able to find work, the two of us have been trying to live on the $985 a month that I get from the VA. We are NOT making it. I am at risk of having my electricity cut off at any time (I still owe over $300) and I expect to lose my phone in less than a week. It is a struggle to even make the co-payments for my medications. If it weren’t for food from various charities, we would be genuinely hungry.

These BANDITS that already live in the lap of luxury apparently felt that they either needed or deserved MORE. They got it by de-regulation of mortgage-based securities that enabled them to go on the kind of speculation investment binge that brought us the Savings & Loan Disaster (another taxpayer bailout) and prior to that the Great Stock Market Crash of Oct. 1929. This time, unlike 1929, instead of jumping out of windows, these money mis-managers asked for and got a huge taxpayer funded bailout with almost no strings attached. A significant part of this money they promptly used to reward themselves with huge bonuses in recognition of saving their shareholder’s hides at the expense of EVERYBODY ELSE.

Did they use ANY of that money to help homeowners by re-negotiating their mortgages to an affordable fixed rate? No Way! Houses that already had construction started on them found that the building loan money had dried up and blown away making the term “construction worker” synonymous with “unemployed” here in Massachusetts.

As a registered Republican for the last thirty years, I have been made a fool of. In the last 8 years the wealthiest top 10% of US citizens enjoyed a huge MULTIPLICATION of their wealth while the middle class was looted of its jobs, retirements, and homes. Welfare to the Wall Street Fat Cats in the form of taxpayer-funded bailouts is OK by this new kind of Republican Party. However helping out people who go to work each day (if they still have a job), pay their bills (unless….), and have played by the rules of the American Dream seem to be at the bottom of the GOP’s priority list.

More than anything else, I am disappointed that I would be forced to choose between the “Tax & Spend” party or the “Borrow & Spend” party.

A couple of years ago, a roommate and I found an ad on Craigslist for a 3 bedroom townhouse at $1,500 a month. It seemed too good to be true - it was too good to be true.

The landlords took our rent and deposit and we paid a few more months of rent. We found out that the house was going into foreclosure, and that we would be getting our deposit back from the rental company.

We didn’t end up getting our deposit back, so we squatted in the house for 8 months as the banks kept telling us to leave. 6 or 7 months into the squatting, the banks had people watching us. A sub-contracting company even changed the locks on us and stole about $800 worth of things.

It’s an awful feeling to know that other people have control over where you live and the stuff you have. It’s an awful feeling to come home and fear that all of your possessions are on the street.

Eventually we were able to settle with the bank, but until then we felt very uncomfortable negotiating with the bank. It was just a scary experience - and it wasn’t like we wanted that. We were just looking for a place to live, a place to pay rent for. Eventually we got a bit of money to settle with the banks to help us move out, but until then it was definitely not pleasant.

There was a couple across the street that had rented from the same rental company, and they left way earlier than we did because they didn’t want their child to be affected by the same scare tactics.

On the other hand, many residents here have been forced to move (evicted) simply because they have lost their jobs. I am one of these people. I was forced to move in March 2008 because I lost my job and could not pay my rent. I moved into a place that unbeknown to me had been foreclosed upon by its absentee owner. Me and three other families were forced to move because the bank wanted to take possession and tear the building down rather than make expensive repairs to bring the building up to code. The bank wanted to “complete” or keep positive its investment profile.

I have not been able to find a job for some time. I have simply had fewer responses and fewer call backs for interviews. Now Tanglewood wants to evict me. I have since filed Chapter 13 Bankruptcy to forestall this action. No mention or notice is paid to this epidemic problem by politicians or civic leaders. I simply want a job so I can pay my bills, get off of Unemployment and Food Stamps, and so I can hold my head high again instead of hang it in shame everywhere I go. Is that so wrong? Attention needs to be paid to us renters as well, and something needs to be done to assist us as well. We need some time to regain our feet as well as home owners do. America, Americans, and politicians need to stop ignoring renters. We are your friends and neighbors too.

In 2006 I was in a car accident with my fiance two months before our wedding. We were building a spec. home and planning to sell it to pay off our small house I had owned for 10 years. I was a single mother, a real estate broker for over 13 years, with little debt (under $200,000). I represented a $20,000,000 project of non-conforming condos and was in line for over 1 million dollars in commission in the course of the following year. I had $80,000 in commission in line for the Summer and early Fall 2007. It all fell apart around that time.

We spent every dollar we made in the spec. home, about $150,000. I designed the house and my husband handled the subcontractors. We paid insane fees for a one time construction to permanent financing. By the time the bubble hit we were told the bank that was going to provide permanent financing was not going to offer any more permanent financing. Also, if we didn’t live in it we would have to pay a non-owner occupant fee of $20,000. Magnet Bank was our lender and they filed bankruptcy less than two months after our closing. Our house closed without being 100% complete. We still have rock and paint that needs to be addressed. As well as the fence, landscaping, etc. So we had two weeks to find permanent financing. We then paid high closing costs again. Then we tried to sell our small home we lived in prior to the spec. home and couldn’t sell it. We were trying to keep our excellent credit and pay off our creditors. But this was a luxury spec. home. We couldn’t sell the spec. because it wasn’t complete. My business dried up for over a year. I earned $180,000 in 2007 and less than $30,000 for 2008. Both my homes are in foreclosure. I rarely see a paycheck. I am filing for foreclosure in two weeks and my new husband and I are trying to figure out where to go from here. He’s trying to find work and we are both hoping to hang on and deal with the bills and lack of options for jobs. We are both in need of furthering our educations and would like to focus on the eco-friendly environmental consultant in order to have more career options. But I am getting many referrals from past clients and I am seeing more activity again. Cross your fingers for me!

I would love to be able to keep my home and pay my bills off. But my business is just starting to slowly see movement. I am in debt over $1,400,000. My properties are worth $760,000. I owe over $1,200,000 on both properties.

I hope this letter helps.

I’m really trying to get my issue out there because I think it’s lousy that my county government is taxing me, two years later, for buying a house - a guy making $40,000 a year who owns a house in a lower middle-class neighborhood. And the tax I’m talking about is no small tax: $1,500, and it’s actually believed that it could be a difference of, are you listening to this, $3,300 next year!!! Could you imagine? You buy a house where the taxes are $4k, the government raises it to $6k, and then threatens to go as high as $7k or more, all while your neighbors are paying $3,500…? It just floors me.

But my additional problem is that no one finds this issue particularly fascinating. It’s complex. And people like simple issues that are more straightforward. That’s when you can take advantage of the sensationalism to get people’s attention. And most people don’t want to read an issue about faulty tax code, or formulas that yield funny results. Of course, it’s the complexity that allows them to steal money from working-class people (and get away with it). And can you imagine just how many people in my county might have tossed in the “towel” and walked away from their homes just because of this tax?

At any rate, I would greatly appreciate it if you could post my blog with your project. As I’m interested in any exposure I can get for this issue. I did borrow the money from friends and family, so I’m not in any immediate danger of losing my home (although this can’t go on for much longer). But that’s not really the point because I just know there are others who got this bill and weren’t in the position to write a check $1,500 on top of their regular bill (plus another $750 because I paid the first installment of 2009), perhaps because they just didn’t make enough money, or because of an ARM that a mortgage broker lied to them about; or because they just lost their jobs in this awful economy we’re all experiencing.

And although I’m sure I’m giving you more information than you’re requesting, I’d like to send a “shout-out” from Illinois to you guys in California not to ever allow your state to develop a property tax code where the taxes are not tied to a percentage of the house. Your state’s in a financial crisis right now, so it wouldn’t surprise me if they start turning over stones to find the money, and take it from me, you don’t want them to start messing with the state’s property tax code. And I should know!!! Tell ‘em to look elsewhere if they want to balance their budget!!!

David’s blog can be viewed at:
http://therearecrooksinillinois.blogspot.com/