Rona M. Fields*
After 25 years in a house I completely renovated in Alexandria, Virginia, I found I was able to profit on my original investment of $76,000 by selling it for $300,000.
The house had been totally renovated and landscaping considerably enhanced with an investment of another $100,000. For many reasons, I wanted to move to neighboring Washington DC . For $350,000 I bought a house in a very good neighborhood during a highly competitive market.
There were problems with getting into the house to inspect and get estimates on repairs and renovations and when two weeks after signing the papers and handing over the money, I got the keys and entered, I discovered that the condition of the building was quite poor. I had budgeted for $100,000 in renovations.
This required a second mortgage and eventually boosted the mortgage up to $400,000 and the house evaluation to $700,000. I was persuaded to get a balloon mortgage- one of the new sub-prime instruments.
The interest rate was pegged to a market profile and market values only went up, I believed. Eight years later interest and terms were no longer pegged to that margin and I was notified that my monthly payments would increase by nearly $1000 a month. Then I learned that y mortgage company had gone under and been swallowed up like Jonah into a bigger whale.
I began to look for ways to turn the situation around but before I could get a handle on it, a still bigger whale swam up and swallowed that one in which my mortgage was not yet even digested. I had a solo clinical practice in my home office insufficient for the income guarantees I?d had eight years earlier and even while I stayed in the house in the whale I was a fish out of water for meeting the increased demands financially and the credit requirements for re-financing. I had become a subprime candidate even as I was installing new floors, windows, doors and furnace.
Then, feeling ever more like Jonah and sighting ?miracle of miracles? the government began o establish Affordable Mortgages. The original banks had all gone underwater, my then biggest bank started negotiations for a new Affordable. That became nearly a full time job for me. Every time I phoned or wrote I talked with a different respondent and got different responses and had to start writing my application from the beginning. At last I had a ?trial? re-finance.
Every month the parties in that company changed and the conditions of my loan changed as well. I was sending in my monthly stipend and often the check was not cashed or was cashed two months after payment was made. I started sending the money by certified mail and I found I was not credited with payments and was seriously in arrears so far as that bank was concerned. Then they were swallowed by Chase! I went back to the former payments and had lost more than $20,000 in arrearages, late fees interest on that and penalties. I continued to write angry letters to the Treasury Department and get responses that they were ?looking into it?.
But the charges and bills accrued and valuations declined (not so much in Washington DC as in the rest of the country).Again I would send in everything they required of me and then get a call saying that there was yet something else to be sent. I didn?t qualify for This kind of loan, but perhaps, I was told, I would qualify for That kind of loan. All the while Chase ran huge ads in the Washington Post and the New York Times inviting troubled mortgage holders to come to meet with them in one or another posh downtown hotel.
I got one of these Prizes! But I had to sign agreements that I owed Chase $26,000 more than my original mortgage even though I had paid every month. Why? I was in arrears because the only way I could qualify for an ?affordable mortgage was to be on the verge of foreclosure?!
My payments decreased by six hundred dollars per month but now my mortgage is 2/3 of the most recent valuation of the house so this minuscule, sliced Jonah got digested by the Largest Whale!
*Rona M. Fields, Ph.D., presently in practice as clinical and neurological psychologist in Washington, DC has been Professor of Psychology, Sociology, Women’s Studies and Senior Research Fellow in Cyber Security at George Washington University, Howard University and many other universities in the US, Europe and the Middle East. She is presently working on her eighth book, Against Violence Against Women under contract with Palgrave-Macmillan, NY.