Monday, January 10, 2011

I've become a statistic -- a cliche of our times.

Last week I had to call the bank that holds the mortgage on our Hawaii house and tell them that I couldn't pay.  Our tenants, who were supposed to be in there for 3 years, terminated a year early (they're active-duty military and have a legal right to terminate early if they get transferred, which they did).  This happened the same week J lost his job.

A financial tsunami, if you will. 

The Hawaii house is in good shape, but it could use some new carpeting and some repairs.  But the money isn't there right now.  Which makes getting a renter in more difficult.  But I don't want to put renters in the house only to have to ask them to leave when the bank forecloses.  And without some kind of loan modification, even if the house is rented, we can't afford the mortgage anymore because we can't get in rent what we pay in mortgage, and with J out of work, we can't afford the loss we were taking on it. 

A financial Catch-22, if you will.

It kind of sucks.  That house was going to be our retirement fund.  Or a place to retire.  Or something. 

But if the money isn't there, it isn't there. 

I'm obviously much more fortunate than many who have to make that call to the bank.  I have a roof over my head, a very reasonable mortgage on my house in Denver, a job, healthy children, etc.  If we lose the Hawaii house, it won't really affect my life much, except to ruin my credit for a time.  But we can survive that.

Oh, well.  I guess we'll see what happens.


  1. Sorry to hear this. Your attitude and outlook are fantastic. We have a rental in the East Village that we are holding on for the same reasons. If I lost my job, we'd definitely lose that place.

    It's just not the same economy we had growing up.

  2. Not the same economy, for sure. But we'll survive.

  3. Lori B12:02 PM

    I love how honest you are Wendy. Sooo many people are in your shoes or have been in your shoes and it is nice for everyone to know they are not the only ones. 7 years ago we had bought a house and months later my husband lost his job. We struggled in that house for 7 years and ended up with ruined credit and many sleepless nights. Finally unloaded it and unloaded a great deal of stress at the same time. Credit will be better in a few years and for now we bought a teeny little house in the country that is full of love and happy kids. When we were going through it though...I felt like we were the only ones.

  4. Allan K.12:47 PM

    What is going on with Hawaii real estate values? Not sure if it is near the beach, but have you thought about using it as a vacation rental? There's several websites that do that kind of thing now.

    Banks seem to be a bit scared to foreclose right now (rightly so), so you may have some time to get this straightened out.

  5. The market was on its way down when we bought, so we thought we'd be OK, but then it tanked, so we're totally upside down on the mortgage and can't sell. It's not really in a vacation-y area -- on the west side of Oahu, though only 5 minutes from the beach -- so it's not really what people are looking for when they want to go on vacation. But you're right, who knows. We're working with a property manager who has some ideas, we'll see what happens.

  6. I am so sorry to hear that - and I admire you for telling this part of your story. Hang in there!

  7. It's OK, and I'm OK. I'm actually not at all emotional about it, nor am I embarrassed. It happens, and like I said, I'm not losing my home. At this point it's essentially an investment property, so I can pretend I'm just a rich person who bet on a bad investment. And all is not lost -- it may turn out OK if we can get a loan modification.

  8. Michelle L.9:52 AM

    Hey Wendy, sorry to hear this, but wanted to let you know that if you did rent the house out, your tenants would have certain protections under the Protecting Tenants at Foreclosure Act of 2009. Just a thought. We also have a 2nd house that we rent at a loss, and I'm in business for myself now, so feel your pain.

  9. Michelle, I was unaware of that law -- thanks for the heads-up. Good to know. And good luck with everything. xoxo

  10. So maybe there are still some options? I hope so. I know you know this, but it bears repeating. Document, document, document. And when they tell you to do X so that Y can happen, ask for it in writing and verify it, if possible.

    We learned this the hard way. Hopefully, you won't have to.

    Good luck!