The “Modification”

Perhaps you’ve seen or heard all the news stories about how mortgage companies are working with home owners to try to prevent foreclosure.  The stories talk about principal amounts being reduced to reflect a home’s current value, interest rates being fixed at a safe level, etc.  Well, you know Flippy’s house is in foreclosure, and that we’ve been working with the bank for quite a long time, trying to work out a “modification” that will prevent us from being escorted from the house by the sheriff.  Our zip code is number one in the country for number of foreclosures, and on our tiny street, there are at least two houses empty from foreclosure.  A bank tried to sell a house identical to ours at an auction a few weeks ago, and the house was purchased by another bank for about $275,000.  They couldn’t even find a person willing to buy it.

We got news on Thursday that our modification was approved.  After assessing our profit loss statements from the last two years, bank account records, etc., they raised our principal to $380,000, and gave us an interest rate of 8% (when average rates for a mortgage are about 6%).  Our new mortgage payment will be a couple of hundred dollars higher than the payment we couldn’t make previously, and we’re paying on an amount which is $100K more than the market value of the house.  Isn’t that just the best news?  We were told by the mortgage company to either accept it, or to have the house put up for auction on April 10th.  They said we could not negotiate with them, and that any monthly expenses we have (like the hundreds of dollars in medical expenses), don’t count towards their assessment of “available income”.  Basically, they took last year’s tax return (which I had to throw together over a weekend), looked at the GROSS income, and decided that was enough to pay the mortgage.  They didn’t care about any other expenses that we need to live, like all the doctor bills we have since we both got sick.  If I needed, say, $1000 per month in dialysis, they don’t care. 

So, we’re up Poopy Creek without a paddle, because we cannot pay the new mortgage amount any more than we could pay the old amount.  The last couple of months we’ve had less than $100 in the bank by the time we get paid, and that’s without paying a $3100 mortgage payment!  The pets still live like little kings and queens, but Flippy and I barely eat because we can’t afford anything more than the most simple, inexpensive food.  I’m having flashbacks to 18 years ago, when I lived in a sleaze bag, “by the week” motel and lived on instant mashed potatoes and marshmallow pies.  I am going to finally give up Internet living and get a normal job, and that would allow us to pay the mortgage on the real value of our home.  We hope that maybe one of our parents can step in and buy our house from us (the bank will sell it to someone else for $275,000, but won’t let us live in it for that), and then we can pay the mortgage to them until we can buy it back.  I tried to get approved for a mortgage so that I could by the house, but without a 700+ FICO score, they aren’t giving anyone a mortgage.  That’s why the real estate market is in such a funk… there are lots of houses available, and there are people who want to buy some of them, but the pure “mortgage companies” are going out of business, and banks are barely approving anyone for loans.  The people getting approved have put down about 20% too, and that’s something I couldn’t do even if I was approved.

It was entirely medical problems and medical bills which put us in this situation.  We didn’t buy a new mansion, we’ve never been on a vacation, we don’t have a second car (or even a new car, for that matter).  I’ve applied for insurance for years and am never approved because of pre-existing problems.  Flippy has insurance, but the benefits have been reduced as quickly as the premiums have risen.  She used up her pharmacy benefit for the entire year in the month of January.  Neither of us can work without medical care and our prescriptions, but it’s come down to us working just to pay for the meds and doctor visits, and there’s hardly anything left over.

Thank you for allowing me to whine.  As I said, the pets are all still well-cared for and given the best of everything.  I’ve cut down on what I give myself rather than take anything from them.  And yes (if any visitors are thinking it), the Internet is a luxury that some people could cut from their budget, but you can’t cut off the Internet if you work from home via the Internet.

I’ll write a blog entry about pets next time.  I can’t afford to take in any new ones, so there will be no orphan kitten photos this kitten season.  I can still write about the pets ones we have, however… they’re still adorable, and the only thing cheerful around here!

Posted by Leigh-Ann on 03/22 at 02:37 AM

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  1. It boggles my mind that the bank would know you’ve been working with them because you are in danger - and only look at gross income, not taking account the expenses it takes for you to live. And then raise the prinicple!?!

    There’s not a lot helpful that can be said - but I am hoping that things will begin turning to the positive for you and Flippy and all of your furry loved ones.

    Posted by prajantr  on  03/22  at  03:43 AM

  2. "the bank will sell it to someone else for $275,000, but won’t let us live in it for that”

    Well that’s just mean and evil.

    Posted by celine  on  03/22  at  04:36 AM

  3. Good luck! At least with a “normal” job you should be able to get insurance at least for yourself. Check into working for the feds/state/county/municipal. The benefits are usually better and you should have health insurance 30 days after starting. Again, good luck!

    Posted by Riley & Tiki  on  03/22  at  05:42 AM

  4. Hell.

    I’m so sorry, but happy you don’t have to be homeless yet. Yet another thing to do if I won the lottery…

    Posted by georg  on  03/22  at  05:46 AM

  5. Oh, my...I don’t even know what to write. “That sucks” - well, you know that already.  “Can I help?” - well, you know I will if I can.  “I’m sorry” - well, you probably know that already too.  Can I help? How can I help? I’ll try to help...gawd, I hate it that it didn’t go better for y’all (but you knew that...)

    Posted by Helly  on  03/22  at  08:42 PM

  6. That is INSANE!

    The idea of having one of your parents buy the house to lower the principal and payments and then buy it back from them when you can is a great idea though. I hope that works out.

    Posted by jg  on  03/24  at  07:50 AM

  7. Crappity crap crap crap! Dat’s not RITE. Them is mean beans.

    Just herd bout a vet clinic in Vegas that haded a fire an lost ~25 aminals. Poor fings!

    We’ll purr fur you… not much else we can do. You mite connect up wif the Cat Blogosphere again to push yur shtuff fur sale… efurry little bit helps, right? http://www.blog.catblogosphere.com

    Posted by Victor Tabbycat  on  03/24  at  10:08 AM

  8. Wow, that is SO unfair.  I do like the clever ideas you’re coming up with though.  Hope you get to stay, at a reasonable price.

    Posted by Ryssee  on  03/24  at  03:15 PM

  9. I am so sorry y’all are going through this. Is there anything I can do to help?

    Posted by Helena  on  03/27  at  08:39 AM

  10. Hi,

    I am looking for input from veterinary practitioners, and those who work in vet hospitals or clinics, about credit card processing.
    What are some problems you are facing with your current merchant service provider?
    How many checks are you guys accepting in overall method of payments? Any bounced checks?
    How soon is the money being deposited into your account?
    What is important to you when processing credit cards?

    Thank you,

    Diane

    Posted by Diane  on  03/28  at  09:11 AM

  11. "Crappity crap crap crap!”

    Victor Tabbycat seemed to sum it all up! I’m so sorry to hear you’re in such a lousy place financially. I do hope things get better somehow for you!

    Posted by Therese  on  03/31  at  08:15 AM

  12. That is unbelievable!  Come back to Canada, both of you.  Healthcare and lots of jobs!  At least in BC.  Mind you the average house price in the Vancouver area is $980,000.

    Ok, come back but avoid Vancouver.

    Posted by von Krankipantzen  on  03/31  at  10:26 AM

  13. Any chance you could take your story to the media to embarrass your bank into reconsidering? There’s nothing like bad press to bring out the kinder, gentler side of ugly institutions.

    Posted by Calamity Jen  on  04/01  at  11:16 AM

  14. Hi, I’m a spammer and had to have my comment modified because it was illiterate.

    Posted by spammer  on  04/10  at  01:05 AM

  15. Grrr.... Damn spammer!  I will hunt you down and tear off your toenails if I find you, and if I can’t do that, I’ll block your IP address.  I win.

    Posted by Leigh-Ann  on  04/10  at  02:47 AM

  16. Nice modification!

    Posted by Laptoper  on  05/14  at  12:34 AM
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