Not too long ago my wife and I were on the brink of foreclosure. I know what that experience is like and I know how my wife and I reacted. For those of you who have never experienced this kind of thing I would like to share our emotional reaction to this traumatic event.
You think you're going to be sensible. You think that you'll have a clear head and that you'll explore all the options. No one pictures themselves acting like complete idiots, putting their heads in the sand until it's too late. But unfortunately, it happens anyway.
I'm sure that for most of you, the spate of foreclosures is an intellectual exercise. I truly hope it stays that way for you; I hope you never have to experience it directly. I think of all those people losing their homes and it's not just numbers to me. It's months and months of horrible emotional pain that they're going through. They're watching their dream of a better life come crashing down around them; For the men supporting their families, it's the worst. They have failed. They're not good enough.
For us, it started slowly. Our troubles began when we sold our home in San Jose, California and moved up to the San Francisco peninsula into a very crappy home in a terrific neighborhood. Our mortgage was much larger, but we could handle it. Once in, we needed to tear down the old house and rebuild as the piece of sh** was only barely habitable.
About the same time, our Senator Diane Feinstein was about knife the people in the back who believed in her and supported her, striking deeply and twisting the knife for good measure. We'll get back to her.
it was an exciting time. My wife had gotten a job as an IT manager and was making 100K. I was busy building the new house and we had now doubled our mortgage again. Still, she had a great job and we had enough money. We were building our own home in a terrific area. We were experiencing our version of the American Dream. Then, the bottom dropped out.
The knife that was wielded in Washington by Senator Feinstein, which cut us so deeply was the H1-B visa program, which she co-sponsored. At the time, tech jobs, particularly in Silicon Valley, where we live, were in high demand. Wages were soaring and students were flocking to classes to become IT administrators. The tech companies couldn't wait for the job market to correct itself and complained about this to Congress, which acted swiftly by flooding the job market with cheap Indian labor.
Suddenly, my wife wasn't good enough. Her company found reasons to dislike her and eventually shoved her out the door and replaced her with an H1-B Indian at about a third of the labor cost. One day my wife had been in demand all over the place, the next day she was out of work and couldn't buy a job. it was that fast. The booming market for tech workers was over in a matter of a couple of months, destroyed beyond recognition because Feinstein was paying back her high tech high rollers.
Incidentally, I talked with a couple of kids who were attending a trade school at the time. They were learning to be IT administrators, but suddenly, none of them could get jobs, which was the point of the whole thing. According to these students whole classes suddenly switched to different professions to cope with the sudden change.
Senator Feinstein is a Democrat and we had elected her to office to prevent exactly this sort of thing. My sense of betrayal was intense to say the least. but I digress. On with the story.
I was still building the house and my wife was now out of work. The bills mounted and we rushed to the end of construction, which left the house somewhat unfinished, which it still is today. Our own house stands as a monument to our financial problems. But we were in. I went to work for a building contractor and my wife started her own business. I was not making much money and neither was she. We borrowed some money.
A couple of years went by. I was still not making a lot of money and my wife's business had gone belly up. She still could not find a good job. Somehow, we kept getting by, only squeaking through the months. The bills mounted. My wife started her own computer consulting business. She had no other choice.
Things slowly started spiraling downhill. We started getting the calls. Anyone who has been in financial distress knows about this. People call because a check bounced. The bank calls because an account is overdrawn. The credit card company calls, the courtesy mortgage payment calls, and they far outnumber all the other calls. Pretty soon, we stopped answering the phone. We screened all of our calls. It was just too hard. We did not sleep well. Our stomachs were tied up in knots all the time. The fear of not being able to pay our debts ate at us all day every day. We couldn't relax.
The fear and poor sleep affected our thinking. We were keyed up all the time and all we wanted to do was have it all go away. But we couldn't. We had to deal with it. We got further and further behind. We maxed out our credit cards and couldn't even pay the interest each month. Several times I was in Home Depot buying supplies for a job only to find out that I had no money in the bank to pay for them. We couldn't ask relatives for help because we couldn't guarantee we'd pay them back. There was no sense in dragging other people down with us.
Did I mention the phone calls? Every time the damned thing rang I felt sick to my stomach. And it rang a lot and it was almost never good news. I made the mistake of giving out my cell phone number and now I had to screen those calls too. To this day, it's hard to see a phone call as a positive thing. The memory never goes completely away.
One thing to keep in mind is that this process crept up on us over a period of several months. The financial pressure built up slowly, growing by bits rather than all at once. The phone doesn't start out being an instrument of terror, it happens slowly. It always seemed as though we could handle it. We'd have a couple of good months in a row and things would be better, then we'd have a couple of bad ones and we slid deeper down. We were never at a clear breaking point so we just kept hanging on. Despite all of the stress we simply got used to being in over our heads.
But we could not keep it up forever. We kept sliding down. we kept missing mortgage payments. First we were a couple of weeks behind, then a month and finally almost two. Every time this happened it cost us a lot of money we could ill afford. Our second mortgage slipped as well. They sent someone out to our house to confirm that we still lived there, since we never returned their calls. We had completely seized up in fear.
We have a friend who is a mortgage broker who knows a lot about foreclosures. We never talked to him, never asked him any questions, never sought his advice. Apparently, this is a typical response to financial hardship. According to him a large percentage of people in this position never seek any help until things are completely out of hand.
I understand this intimately.
Everyone else seems to be doing well. It seems as though you're the only one in the whole world going through this hell. Along with financial failure comes a boatload of shame. Everyone else seems to be able to pay their mortgage and keep their house. What's wrong with you? This thought was going through my head constantly. I did not want to talk about it to anyone. I always lied about how well we were doing. I didn't want to admit to anyone, least of all myself, that I was failing.
Finally the day came. We received a foreclosure notice. Everything I had built up over the last 20 years was about to go away. The pain and guilt I felt over this was almost unbearable. A foreclosure notice! They were going to take our house away. It was possibly the lowest point in my life. A great big Seal of Official Failure. It was horribly, horribly humiliating. We received letters constantly from Real Estate agents and people drove by our house giving it long looks. The foreclosure notice turned up in Google searches announcing our failure to the entire f***ing planet. I hated that most of all.
I had visions of having to live in a crummy one bedroom apartment over a carport. We would have to deal with our many cats and move away from our wonderful neighbors. It would be a very disruptive experience. We were going to go backwards financially. Our vision of our lives getting progressively better was about to come to an end. We were going to have to start all over again.
I didn't know it at the time, but this was a turning point in our lives. Some desperate hustling turned up some jobs for me and I got enough money together to stave off the foreclosure. I made some changes in my advertising and it paid off handsomely. My wife's business began to take off and we slowly began making enough money to not only pay the mortgage each month, but to start to pay down our debts. All except the credit cards.
I'm going to leave this entry with this bleak number: 30. That was the percentage rate we were paying on our credit cards. It's the interest rate that desperate people have to pay. It's an interest rate that will stay with you through bankruptcy and beyond. It's a debt designed to never go away. It's a racket not even the mafia could dream up. It's our fault that we got into the whole financial mess, but we live in a system where that severely punishes you once you're there.
We were able to get out of it. Since we were now capable of paying the money back, I could ask family for help. My father had the means and willingly loaned us the money to pay off the credit cards. I have tears of gratitude as I write this because it saved us from eternal debt. As a matter of fact we'll finish paying him back this year.
Our house is still unfinished and we're still not flush with cash and of course, health care beyond band aids and disinfectant is just a distant dream. We have nothing saved up and almost no retirement even though I'm in my late forties, but we're still better off than many other people. Oh, how I feel for them.