Foreclosure, the 2020 Pandemic and Me: Survival 101
Updated: Nov 8, 2021
I’m a 43-year-old homeowner whose faced foreclosure three times between 2019 and 2020. I make over forty thousand dollars a year at my current place of employment. I’m a student, blogger, and freelance journalist so the question lingers, how did we get here?
I purchased my home at the age of thirty, while still young, focused, and responsible. I made less in taxable income than I do now, punching in the clock at thirteen dollars and fifty cents an hour. I’m somewhat astounded as I look back at how everything fell into a place.
Purchasing a home was on my “you will complete 5 goals by the age of thirty” list. I called it my “5 by 30,” that I marked off happily in 2008.
When I found my 4-bedroom home, a foreclosure property, it wasn’t my dream house that I envisioned but it was my startup home, and just enough to fit my budget of raising four young children. I had one credit card, three-hundred and fifty dollars’ worth of SNAP/food stamps (Supplemental Nutrition Assistance Program), a two hundred and fifty dollar car note for one vehicle; and more importantly, I had cash in the bank.
I had no idea that I was buying a house in a fickle market—Wall Street run amuck, mortgagers were selling houses to just about anyone even if they couldn’t afford the properties (including myself, maybe), creating an inflation and a volatile situation that eventually collapsed. I’d be remiss if I didn’t tell the truth, that I lived comfortably during that timeframe of making less per hour in an antiquated evolution. I had simple wants and needs unquestionably before the heaving of my social media presence.
“The collapse of the housing market — fueled by low interest rates, easy credit, insufficient regulation, and toxic subprime mortgages — led to the economic crisis”
(Quote from Business Insider)
I was on my second car, a 2007 Chrysler Pacifica, and a three hundred and thirty three dollar car payment. I didn’t need the car. I wanted it because I knew that I had good credit and could get it. The payment jumped eighty three dollars. It was still affordable.
The plot thickens.
I began getting behind on my mortgage. As the breadwinner who seemingly had it all together, I was, I am, terrible about finances.
By the end of 2012, I was applying for a loan modification, and got approved. I never heard of such a thing before, modifying the terms of a mortgage loan, but it seemed like a legitimate “easy out of debt” clause that the bank put into place for struggling homeowners.
A loan modification is a solution for delinquent homeowners, that places the owed amount to the back end of the loan.
It’s a fancy way of saying payment arrangement and deferment plan where the homeowner is responsible for paying the missed payments later although it increases the mortgage term depending on the delinquency and workout solution. While some modifications won’t change the term of the loan, there are others that will extend the timeframe while calculating a new mortgage amount so owed debt can become paid, including the new contractual agreement. (Loan Modification vs. Refinance | Rocket Mortgage).
Let’s say you started with a thirty-year mortgage. By the time the bank adds the missed payments to the back end of the loan, while reconfiguring the payment amount, you will have several additional years tacked on, extending the mortgage from the thirty years you started. Keep in mind that you’ve been in the property x number of years already. This cancels out the original agreement and replaces it with something more affordable. The only problem is that the mortgage starts over from the date the new modified mortgage goes into effect. In essence, this new plan wipes out all the equity and escrow within that account assuming there’s something leftover when the bank modified the terms of the loan. You were in the house nine years already— Now, you’ve attained a mortgage for thirty years (under the new terms) plus the nine that you were there.
Considering that breakdown, bear in mind that when I got that modification in 2012, the bank didn’t discuss the number of times I could get approved for a modification (prior to the 2020 Pandemic). Maybe I didn’t ask the lender the right questions. There is a limit. If the borrower defaults on their initial modification, the borrower cannot get another loan modification for 12 to 24 months. It depends on the type of modification, and it’s solely up to the discretion of the lender, or the investor if they are willing to approve it. There is something else that homeowners should know if they are considering the modification program after falling behind.
Is the housing market moving?
Did the investor/banking servicer make money on their investment when they gave you the loan?
Who is holding the note? Just because the bank is servicing the loan, it doesn’t mean the bank is holding the note.
Did your property depreciate over time?
Did you do anything to add value to the depreciated property to hike the appreciation back up?
Did you make payments while in delinquency?
Both 4 and 6 are very important questions. We will get to that soon.
If you continued reading until the breakdown: Sorry. You won’t get any rewards but you’ll receive transparency, feedback, and free golden nuggets of how I overcame foreclosure.
Slowly and catastrophically, the toxic cycle of bad money management initiated 2011. I received several pay increases from my employer, and it still wasn’t enough because with each increase, I’d upgrade something else that I didn’t need like a new 2010 Ford Explorer with a new car payment of four-hundred and thirty-three dollars (2013). Therefore, the state stopped giving me SNAPS. I now fit the description of middle class by North Carolina guidelines for receiving assistance.
You tend to make bad decisions when you’re in trauma or grief. The brains fight or flight strategy kicks in when dealing with high levels of stress, and you do odd things that you wouldn’t normally do like dining on comfort foods or retail therapy, shopping until you drop. It’s our natural response to dealing with trauma, and it’s a recipe for disaster because we either lose money or gain weight from compulsive spending and eating.
My sister died March 5, 2013. I was already recovering from debt pangs, and the possibility of foreclosure when she passed. I had two things going for me. I was employed and I knew the loan modification was optional if needed to get back on track. (The arrogance in me spoke loudly).
I welcomed my sisters four boys to my family because I understood the assignment, and I knew my sister wanted it that way. She would’ve done the same for me without hesitation.
This extension took my progeny up to the number eight temporarily with three girls and five boys. Can you imagine being on a fixed income and then suddenly, your
family grew by four humans and a dog? That’s summarizing 2013 in a nutshell. I got by on astronomical trial and error while never really learning from the lessons (way too many to count). I was cloaked in a costume, a mirage that allowed me to look as though I had everything under control. I didn’t. It was too much. I slowly unraveled mentally at the seams, but God! That’s a different article that we’ll visit soon entitled “Toxic parenting and toxic teens: Where do we draw the line?”
I took out loans, went exempt on my state taxes (for years), borrowed money if I could to provide for me and my family over the course of 8 years, never really settling in debt but not saving one coin. Not one. How could I— I spoiled the kids, giving them everything they asked for, hoping to make up for their loss, in addition to their new normalcy while careful of not making them feel more special than the others because they were all the same in my eyes, and God gave them to me. My rebellious motto that further spurred debt was, “Even if you mess up your credit, credit can be rebuilt.”
I was such an idiot.
I can’t remember much about this year other than being on the fast track to foreclosure again, rinse and repeat. I obtained my second modification through Bank of America right before the scheduled judicial hearing.
You must understand that there are several types of foreclosure proceedings depending on the state. There’s Judicial, Strict Foreclosure and Power of Sale. North Carolina is a Judicial State, and that was my saving grace the entire time.
Judicial proceeding is when you get a scheduled hearing through foreclosure court, you can either bring your loan current up to three (maybe five) days before the court hearing, or file for chapter 13 bankruptcy before the auction of your property. You can prepare for the devastation of losing your home and start over… in about 7 to 10 years. That’s always an option, but that’s a last resort. In fact— scrap that and take foreclosure out of your mental bank.
I’ve been through insurmountable challenges from 2013 until now with finances and the kids though several of them moved out and came back. They keep coming back.
2017 is the Armageddon of all my trails that tested my single parenting, my strength, and my goodness without remorse. That year stands out like a sea of fire spreading across a once beautiful and flourishing forest.
As for finances and budgeting, let’s just say I rinsed and repeat, still experiencing crisis after financial crisis. When you live paycheck-to-paycheck, there isn’t much wiggle room for mistakes. As a single parent and homeowner, it’s difficult getting repairs done and planning for rainy days or in my case, a Tsunami.
Regarding my fallout and adding to the calamity, I purchased another car with an even higher note, a 2018 Kia Forte touting four hundred and seventy-four dollars.
If you would’ve told me that by summer of 2019, I’d be in foreclosure again fighting for the same home that made my heart swoon years earlier, I’m not sure I would’ve gone through with the purchasing process in 2008. This was the mecca of challenges.
I own my mistakes that led me to foreclosure in the first place, irrational spending, no budget, no plans, only survival. Even though I’ve made those mistakes, I don’t think folks should endure the things that I did while going through the process of losing my home. I describe it as humiliating, extremely stressful, ruthless when you consider the investors (more blacks than whites) and their unpractical, unorthodox, and unethical measures of procuring my property by any means necessary, even through Facebook messaging—Traumatizing best describes the experience. I probably have PTSD.
I was told by Mr. Glen Burkins, a respected journalist out of Charlotte, NC, who runs the QCity Metro news site, to never write a story out of anger. He emphasized gathering the facts, while taking emotion out of it. How can I write about something that impacted me in such a way that I almost lost everything?
I’ve been disgusted for two years, and I’m finally at a mental space where I can write this story, in hopes of spreading awareness about the severity of the Black housing crisis across America.
There is a disproportionate number of Blacks and Latinx borrowers that faced hardships economically that asked for financial assistance in year 2020. A data sheet published on the National Consumer Law suggest that Black and Hispanic borrowers were less likely to get home saving relief compared to white borrowers. In 2020 Blacks owned homes at 44%, while whites owned homes at 74%. The US Census Household Survey suggest that people who fell behind that indicated they were Black, Latinax, or borrowers that reported two or more races, and people identifying as other, were less likely to have access to plans to help borrowers avoid foreclosure.
In my case, I knew about all the plans.
I applied for a loan modification and got denied due to the modification I requested in 2017, with final approval June 2018. Also, I didn’t get approved because my home depreciated over time, so it would’ve been pointless for the bank/investor to approve the modification and extend the term of the loan (I didn’t know that).
I contacted the North Carolina Housing Finance Agency as backup— turned in all the paperwork my single point of contact requested. I even attended a credit counseling workshop only for the North Carolina Housing Financing Agency to deny my request for assistance. NCHFA said I wasn’t in hardship. Truthfully, I wasn’t. I needed NCHFA to pay the missed mortgage payments, bringing my account current. That rejection lit my soul on fire like an anime cartoon, Dragon Ball Z. I was livid.
My application for assistance rejected because I wasn’t poor enough to receive assistance on paper. Believe it or not, at one point in time, there were several economic brackets. I fit middle class. Not anymore. I’m considered lower middle class—and that’s about right. When you consider changes in the economy over the last year for simple things like groceries ( a pack of chicken wings is twenty dollars), electricity, and water. The businesses with employees, did not accommodate that shift. The businesses did not raise wages objectively until this year—Meaning, the cost of living did not match wages per hour depending on place of employment.
Money news: https://money.usnews.com/money/personal-finance/family-finance/articles/where-do-i-fall-in-the-american-economic-class-system
That denial presented a challenging dilemma. I was already in foreclosure with Black investors showing up, calling, and harassing me throughout the day [No lies being told]. I didn’t understand how the very same Blacks that contacted me, refused to share information that could potentially save my home. I wondered, who helped whom when we think about the larger and broader spectrum for gentrification.
However, in that timeframe I learned that whenever you’re in a workout of any kind, the banks will hold the account [foreclosure proceedings] pending loss mitigation. Therefore, I got crafty by stalling the bank. You have a certain amount of time to request the paperwork for a loan modification. That’s about five days give or take snail mail (U.S Postal Service). You are then required to turn in the paperwork and hardship documentation. You have a set time frame of about 15 days to do this. If you turn in some and not all the documentation, this extends the date 15 days more from that original date. That’s a month of pausing foreclosure. Imagine doing it for 9 months.
They were on to me.
The bank put me in foreclosure three times between the summer of 2019 and February 2020 where they hired an attorney, who served me a foreclosure summons on three separate occasions. Might I add that you cannot refinance while in foreclosure—Your Credit/ Fico Score is shot to the depths of h*ll. No bank will take a chance on you until you improve your credit raising it 580-700 or bringing the account current.
Each time my modification got denied, I would submit another request for modification. It’s not that I tried to beat the system, I felt that the banking system failed me. In fact, the bank flagged my account. Each time I requested a loan modification, the single point of contact (We’ll call her CR) would call me up. CR tried her best to discourage me from applying again. One time, she told me that my modification was rejected as soon as I submitted the paperwork.
Wrapping up: The light at the end of the tunnel. A horror story for many in the nation but a beacon of hope for me… The 2020 Pandemic.
At first, you couldn’t tell me it wasn’t racism. You couldn’t tell me that I wasn’t being pigeonholed by a predator lender, and forced out of the shelter, my place of refuge, Zen, my secret hiding space and safety from the world. I was adamant in believing the hype and all the negative things I’d read about my mortgage holder online. There was small truth to the complaints. The bank paid out millions in a class action suit for dual reporting and illegally foreclosing on homes while homeowners were in loss mitigation. The negative reviews dwindled because Covid-19 reared its ugly head and put the world on pause with a stay in place order lasting several months, forcing banks to give homeowners including myself, a loss mitigation option, a forbearance plan with the CARES ACT Forbearance Program / Covid 19 Deferral Pl.
I am saddened by the devastation that the Pandemic caused to the millions affected and their families. The heartening reality is that I would’ve lost my home if the pandemic did not exist. My payments, foreclosure, reports to credit bureau, everything [except predatorial investors] that negatively impacted me paused for 18 months.
I faced hardships in terms of higher bills and groceries, while the kids were home sheltering in place and doing remote learning. April of 2020, both my nephews caught Covid-19. I totaled my car, and that spiraled things again because I purchased a new vehicle with a higher payment than the last. By late summer, my dad had a pseudo-aneurysm, my daughter got shot, my oldest nephew was picked up for first degree murder, and the IRS froze my banking account. All these things happened in a span of two weeks, but I’d been in my forbearance plan for a total of seventeen months. I remember riding in my car and saying loudly (God talks), “God, I don’t want to cry. I want to overcome.”
I have good news… I’m still overcoming.
When I started the forbearance plan, I made additional payments towards the missed mortgage payments. You can’t make payments while in foreclosure, but you can while in forbearance. I utilized the Pandemic forbearance to rebuild, a one shot in a million. I needed to come from under the mountain of debt and shame. When everything crumbled in August, I didn’t panic. I planned for that Tsunami, that rainy date that I mentioned earlier by working on my credit starting December 2020. I finally got to a place where I was approved for a major credit card, in addition to minimizing my purchases for things that I didn’t need, like eating out and retail therapy, because that was my vice, and toxic trait-- Spending money without provision.
My mindset tailored this phrase within the last decade, “You already messed up. What more could go wrong? Get something else. F**k it!”
Talk about the immaturity of it all and doing this crazy stuff and cultivating these bad habits until the age of 43. I am in a better and mature place now and yes; I finally got that loan modification after boxing two years in the ring with the bank, and me fighting like Deontay Wilder while getting my a** kicked— and so many prayers. Not to mention the mental breaking point of being fed up with my own mess that landed me in debt and foreclosure in the first place. It is not a walk for the faint of heart. This type of struggle isn’t for the weak willed. I struggled to live more than one lifestyle-- The duality to hide so many extremes, still trying to be a good person with foreclosure as a capricious place setting in my life, front and center. I don’t want you to go through that. Things happen and people make mistakes—the point is to learn from those mistakes by creating positive habits so that history doesn’t repeat itself.
I promised God that I'd be transparent once he pulled me out of the wilderness-- Consider my lessons your road map.
Tips to Improve Credit: https://www.businessinsider.com/personal-finance/how-to-increase-your-credit-score-improve-credit
Forbearance Outline: https://www.fanniemae.com/here-help-homeowners/you-dont-have-repay-forbearance-amount-all-once-upon-completion-your-forbearance-plan-get-facts
Mortgage and Housing Assistance: https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/help-for-homeowners/learn-about-forbearance/
Cost of living calculator: https://www.bestplaces.net/cost-of-living/charlotte-nc/indian-trail-nc/40000
Homeowner Assistance Program: https://money.usnews.com/money/personal-finance/family-finance/articles/where-do-i-fall-in-the-american-economic-class-system
Homeowner Assistance Plan: https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/homeowner-assistance-fund