they went to the bank and dropped off the keys to the house

[radfringe]

a friend of our's brother went to his bank this week and dropped the keys to his house on the desk

the brother had taken an early retirement last year when he turned 62, (he has some medical problems). His wife was still working, making good money.

In April, the company she worked for went belly-up in a domino effect from the Country-Wide crash. They had some savings, figured they would sell the house and move. The wife went looking for work, he found a part-time job, they put the house on the market.

5 months later, she still can't find a job at the salary they need, she's working for a little above min. wage, full time, but it does have health insurance benefits. He had a heart attack in July, and required by-pass surgery. There were some things the insurance didn't cover, and that just about wiped out their savings, and he had to give up his part-tme job.

The house is still on the market, they had alot of people looking at it, but not one offer, and they can't afford the mortgage payments anymore. The mortgage was a regular one, with fixed rate... not a "too good to be true" deals. They did try to work something out with the bank, but couldn't.

They dropped off the keys at the bank, utilities will be shut off on Monday, and they will leave. They are heading to Denver, staying with a friend. The wife has a job in Denver, working at for a caterer, and he'll be looking for part time work.

[lostnotforgotten]

1. Where's Their Bailout?

eom

[BlooInBloo]

2. Housing is still over-valued. Unless they bought the home recently to flip it...

This shouldn't be a problem.

[radfringe]

8. not a "flip house"

they bought it over 10 years ago at a very reasonable price. did all the right things in terms of making sure they could afford it, they put some more money into the house for improvements, but nothing outrageous

just another american family with a dream that turned into a nightmare - through no fault of their own

[BlooInBloo]

10. Oooh - the issue here isn't the housing bubble - sorry - misunderstood.

[SmileyRose]

13. it's likely a problem because of no buyer.

Either housing values in the area have dropped below the mortgage payoff plus home sale costs or else the buyers can't get loans because their own income has dropped. There's also the fact the lender refused to work with them on restructuring the loan - or something.

You are right - it SHOULDN'T be a problem - but it is.

[BlooInBloo]

14. Housing prices are not below where they were 10 years ago.

[firedupdem]

3. I understand their situation 100% Mine was pretty similar...

now I'm in nebraska. My husband is working..we're still struggling financially and I haven't found a job yet. It's very depressing to leave your family and friends. Very depressing. I understand what these people are going through.

[firedupdem]

4. oops dupe... n/t

[Left Brain]

5. An all too familiar scenario

that is quickly becoming the norm.

[grasswire]

6. Grapes of Wrath part 2

Anyone who hasn't seen that movie ought to now.

[dana_b]

15. that book will stick with me forever!!

the ending was soooo tragic and yet sweet.

[phantom power]

7. Bad times are coming.

Any family is about a one-paragraph story away from losing everything. A lost job, a health problem, that's all it takes.

[phantom power]

9. Bad times are coming.

Any family is about a one-paragraph story away from losing everything. A lost job, a health problem, that's all it takes.

[Liberal_in_LA]

11. true. n/t

[radfringe]

12. our friend says this is happening all over his town

people are dropping off the keys and leaving. some neighborhoods now look like ghost towns

[grasswire]

16. in some cases, there's no "bank" to take the keys

All these people whose loans were sold and re-sold.

I want to know what the reaction is at the bank when the keys are dropped on the counter.

[melody]

17. The statistics don't show the reality like this does

Thank you for the story. There are people actually living these tragedies within each point of dry statistical data. :(

[Blue Diadem]

18. I think there has been more house loss like your friend's brother than people realize.

First, I'm sorry about their situation. It's heartbreaking to hear their story. People who have worked their entire lives and then get sick and/or suffer a job loss lose everything, while the rich just keep getting richer.

Earlier this year our former AG of Ohio, said about 1/2 the foreclosures in our state were related to job loss and/or medical problems.

[snappyturtle]

20. I think your AG is right. Isn't it interesting to listen to the reasons on

teevee for all the defaults? Many claim or blame the sub-prime mortgages but they account for 12% of the defaults. It's all about jobs! Oh, and of course, the disparity of incomes.

[TahitiNut]

19. It's happening to more and more. The Ostrich Cult will invent their "can't happen to me" charades ..

... but the FACT of the matter is that the mine floor is knee-deep in dead canaries. Millions of people have confronted this economic 'crash and burn' scenario over the last 10 years. It WAS happeniing during the Clinton-Gore years, as well. Listen up.

In the mid-90's, the law was changed regarding capital gains taxation on the sale or exhange of one's priamry residence. The law, for many DECADES, required folks to buy a new primary residence within 18 months for a price at or equal to the net sales price (sales price less cost of sale) of the prior residence or be subject to capital gains taxation on that sale. The new rule, now in effect, allows a lifetime individual exemption of $250K.

Why?? What really drove this? Well, it was clear that home prices were skyrocketing ... in California and other markets, the median prices of existing homes were at levels unheard of before - reaching 4, 5, 6, and 7 times the meidan incomes in those areas. People were LEAVING those areas, selling their homes, and moving to areas with loser cost homes. But these refugees from the inflated markets were looking for homes of equal or greater cost, to protect their "equity nest egg." The people of Oregon, Texas, and other low cost areas were ENRAGED!! Those damned Californians were coming in and buying mansions and making it impossible for OUR kids to buy homes. (Never mind that the values of existing homes benefitted. Provincialism has funny results.) At the same time, the economists saw that we were confronting a NATIONAL housing market and the inflationary pressures of California were going national. The 'regional' housing market was rapidly succumbing to the national fad of leveraging a housing down payment into increased equity as home prices went up.

But it wasn't enough ... and there were some major casualties. Canaries were hitting the floor of the mine and we IGNORED them. People caught with higher-priced homes in those areas, when it came time to move, couldn't sell them. The transferred California equity of $100K and more evaporated. (The locals grinnned. That California 'lihbrul' got fucked. Yippee!) We're NOT talking about people with low down payments here, folks. We're talking about people who bought a home in eastern Washington for $270,000 with a $100,000 down payment from the gain on the sale of a California home. Then, after the tax change and a regional downturn - increased unemployment and more people leaving than arriving - they couldn't sell it for the $170,000 mortgage ... even AFTER taking a $100,000 loss. Foreclosed. Wiped out. Totally.

Then the dot-com bubble burst and all the speculation money migrated to the next bubble - one which was already inflating, but now there would be no limit. Housing.

But the specculators faced a problem. Nationally. Folks still weren't earning enough. Median wages and salaries have NEVER kept up with median home prices in the last 28 years. Never. So it's time for more inventive ways to qualify folks. NINJA loans. Even more, they found they could take folks who actually qualified for traditional 30-year-fixed mortgages and shell-game them into the sub-prime and Alt-A mortgages ... especially Latino and black buyers. Yippee!

Here's the deal. "Those people" moved into "our" area and took "our" jobs and bought nicer homes. "We" think it's justice that "they" got fucked. (Never mind that "we" made money in construction - especially with imported labor - it was great to see those "outsiders" get fucked.)

But then "they" became "us" ... as it always turns out. We ignore the plight of others at our peril.


Now here's the newsflash: NOTHING HAS CHANGED except the value of our EXISTING homes. (It's going DOWN, DOWN, DOWN.) Wages and salaries are still getting worse. I predict that unemployment will reach 10% nationally before next spring. Industries dependent upon housing are going down the tubes. Home construction? Decimated. Realtors? Decimated. More and more mortgages will capsize (mortgage greater than market value) in the next year. The median home price will drop MORE THAN 25% in the next year. We're fucked.

[LaurenG]

21. My mom moved in with me a year ago. Her house in NM

had not sold, they even lowered the price 3 times, it didn't help to sell it. At some point last year she couldn't afford to pay her mortgage and eat, so I feed her and pay my mortgage and she pays her mortgage from here. It sucks - it truly sucks.

[ConcernedCanuk]

22. Seems to me their loss is a direct result of not having Universal Health Care.

.
.
.

Ya know,

that's the stuff us dumm Canuks have.

WHAT'S MORE,

studies show that the US spends MORE per capita within their health care system than WE do for our universal health care.

But then again, we don't got all them HMO's making a killing off of their half-assed coverage.

[yellerpup]

23. A healthcare fix needs to be a first priority.

Paying for medical treatment has ruined so many people and we simply can't let it go on dragging down more and more families. Sad story. I wish your friends the very best.

[Trillo]

24. It's disturbing

to know that agreements between wealthy people (derivatives) can so easily be transformed into "coin", the subtle technical distinction between "coin" and "money" notwithstanding.

Each and everyone of the rest of us, meaning poor folks, should have equivalent power.