Not too long ago, we met a couple who were facing foreclosure. The wife had contacted us and asked us to come out to the house to dis- cuss the situation and explain their options. This was the couple’s first home, and soon after buying it, they hit some hard times. The husband worked whatever hours he could find and was busting his hump to scrounge up side jobs, but nothing seemed to dig them out of the financial hole they had found themselves in.
When we met with them and discussed their options, we asked if they could ask anyone in their family for help. In fact, we asked several times, and the answer was always, “No.” As time passed and their redemption period ticked away, we tried desperately to find a solution, but our options were running out.
Finally, just a few weeks before they were scheduled to lose their home for good, we thought we would ask one more time: “Is there anyone at all you can ask for help?” Again, the wife answered, “No.” This time, however, the husband decided to give a different answer. He said, “Maybe.” After all this time and frustration, we finally got a maybe. That maybe was music to our ears.
So, we asked the logical next question, “Who?”
“Well,” the husband answered, “her father.”
The wife still wasn’t sold on the idea of calling her dad. She tearfully explained that they were trying to make it on their own, and she desper- ately didn’t want to have to call her father and explain how they had failed. She was afraid that her father would be disappointed in her. After all, he had built a successful business of his own.
We understood, but we also put it into perspec- tive for her. We asked, “What do you think would be more disappointing for your father — helping you out when you’re trying so hard to make it work, or hearing about his grandchil- dren, his daughter, and his son-in-law being evicted when he was only a phone call away and could have stopped it all?”
Well, that rhetorical question was enough to convince the wife to call her dad, right then and there. Her dad was sympathetic, and you could hear the genuine love and concern he felt for his daughter and how hard it was for her to call him.
As it turns out, her dad is a very wealthy New England businessman. He cosigned for them and handled the financing with payments they could afford until they could get back on their feet. At their insistence, he charged them inter- est (after all, they were determined to make it on their own and just needed a little help right now).
All’s well that ends well, but they were willing to lose everything because they were too embar- rassed or proud to ask for help. Don’t let the same mistake lead to the loss of your home and the eviction of your family. We wouldn’t have wanted to be on the other end of that line when she was forced to call her dad and explain that they had lost everything and were being evicted. His only response at that point could have been, “Why didn’t you call before it was too late?” Granted, you may not have a wealthy relative standing in the wings waiting to bail you out, but if you don’t ask, you won’t know what help is available.
We’re not saying that you should plant a sign in your front yard that says
“FREEFORECLOSUREHELPWANTED,” but you should certainly talk to close friends and loved ones — especially if they’re in a position to help you. Even if they aren’t in a position to help, they may know someone, or know someone who knows someone who can point you in the right direction, as demonstrated in the “Asking dad for help” sidebar.
When you’re reluctant to ask a close friend or relative for help, consider this:
How would you feel if you were in a position to help this person, and he didn’t come to you? You’d probably feel as though he didn’t love you enough to ask for help or he was afraid you would judge him. You probably wouldn’t want to feel that way, and neither do your loved ones. Don’t do a disservice to your closest friends and relatives by not asking for help when you need it.
Shaking Any Counterproductive Emotions
Emotions are funny things — one moment, you’re on top of the world, and the next you feel like you’ve been run over by a Mack truck. When you’re in foreclosure, the emotional swings can be just as wild and even more so. Just when you think you’ve made a breakthrough, you encounter a setback, and all the positive thoughts in the world don’t seem to be able to pull you out of your despair.
Despair is dangerous. It can cripple you and convince you to give up even when you’re making great progress. Despair is real, though, and you’re going to experience it, so prepare yourself. Know upfront that you’re going to expe- rience disappointments, so you can recognize those disappointments early and get over them more quickly.
Some days, you may find it nearly impossible to get out of bed and step into the boxing ring one more time, but you have to force yourself to do it. The alternative is always much worse. Many people give up when they’re closest to success — don’t quit prematurely.
Facing your fears
In our business, we take a lot of risks. When we’re considering a risky business decision, we always ask ourselves, “If we do this, what’s the worst that can happen? Can they skewer us and roast us over a pit?” Of course, the answer is usually, “No,” and we can then proceed to overcome our fear and jump right in.
This approach is exactly the same one you should take to overcome your fear. The worst thing your bank can possibly do to you is evict you from your home, and they can’t even do that if you move out prior to eviction day.
They certainly cannot skewer you and your family and roast you over a pit.
Anything you encounter by trying to remedy the situation cannot possibly place you in a worse position than the one you’re already in — assuming, of course, that you don’t go along with some quick-fix con-artist scheme. The realization that you can’t make things any worse may be enough to liberate you, so you can start taking positive steps in the right direction.
Try one solution. If the solution doesn’t work, try it again or try something else. Remain diligent — you never know when the big break will come, but it will nevercome if you don’t try.
Some solutions are better than others — that’s why you need to educate your- self so you can chose the solution that’s best for you. Know the pitfalls, be able to recognize the scammers when they come calling, know your rights and options, and then develop a plan of attack that will put you on the path toward renewed success or, in some cases, moving on. (The chapters in Parts II and III of this book can bring you up to speed in a hurry.)
Getting over guilt
Guilt can be a positive or negative emotion. If it drives you and other family members to stop doing something that resulted in the foreclosure, and then inspires you to take the action necessary to resolve the problem, it can be a very positive force. If it simply turns the situation into a blame game and makes the guilty parties feel so terrible that they have no desire to do any- thing, then guilt can be terribly destructive.
If you did or failed to do something that eventually triggered the onset of the foreclosure process, the best way to overcome the guilt is to come clean. Lay your cards on the table. Get whatever happened out in the open, deal with it, and then let it go.
You cannot change the past. You can apologize, you can feel horrible, and you can even beg for forgiveness, but it doesn’t change the past. What’s done is done. After you own up to the mistakes that caused the problem, you can begin to focus on the solution with a clean slate and a lot less emotional baggage.
Denial and blame are killers. To solve the problem you’re facing right now, you have to forgive yourself and the people who are going to be in the trenches with you. The lies, the cover-ups, the deceit — they all hurt, but to get through this you have to be able to get over the past. Sometimes the hardest thing to get over is the feeling that you’ve let down someone you love.
This may sound a little sappy, but it’s true: If you save your house but you lose your relationships in the process, you’ve really lost something. A house is just wood, bricks, and mortar, but a home is where families and loved ones live. Focus on saving your home. You may still lose the house, but if you save your home, you’re going to be much happier in the end.
Side-stepping shame
“What will the neighbors think?”
That is the single most common question we hear from people facing foreclo- sure. They’re worried that the neighbors are going to think less of them for not being able to afford their house and not being able to keep up with the Joneses. Most people feel some shame over letting other family members down — perhaps their spouse or their children.
The best way to overcome any shame you may be feeling is to put foreclosure into perspective. The fact is that most Americans are fairly deep in debt. We live on income that we’re not guaranteed and spend money we don’t have.
According to some estimates, most American households are really only three to six months away from foreclosure, and that includes your neighbors.
Take away one of their dual incomes and see what effect it has. Cut the bread- winner’s overtime or hourly wage and see who spirals into foreclosure. Have the engine blow up on the family car that costs $3,000 to replace, or bury a loved one at the cost of $5,000 that you just don’t have right now, and guess who will suffer. Saddle one of the happily married couples across the street with an alcohol, drug, or gambling addiction and see how long they can keep it all together.
If you begin to feel shame, keep the following important points in mind:
Every family has its secrets.Your foreclosure may be mild compared to some of the secrets in the neighbors’ closets.
Most of your neighbors are never more than a few months away from foreclosure themselves.
Keeping your head above water is not as easy as it looks on TV.Life can throw you a lot of curves, and you and others can make poor choices that make it even more challenging.
Confronting difficult issues that life presents you with is more honor- able than never having anything in life test you.
Letting go of your anger
How could this happen to me? What was my spouse thinking? The bank screwed us! My boss or company screwed me! I’m mad as hell and I’m not going to take it anymore!
Okay, so how’s that working for you? It could be working foryou or against you, depending on your approach.
Bag that energy and emotion and focus it on a positive solution. When you’re upset and angry, you tend to make lousy decisions — that’s true for all of us.
So, find a way to direct your anger at the problem; otherwise, you may as well add a bailiff to the list of people you hate when he shows up to evict you.
Maintaining your composure
Cooler heads usually prevail, and for good reason — because they are reason- able.People who maintain their composure think more clearly and usually make sound decisions.
If you’re trying to work out something with the bank and you’re irate, or all over the place, how far do you think that will go with the hourly employee on the other end of the line? How willing do you think he’ll be to assist you if you sound irrational and make unreasonable demands?
The bank’s employees are just doing their job, too. You have to help yourself by working within the system, and that includes maintaining your composure so you can get something accomplished.
Accepting that you may lose this house
In Chapter 7 of this book, we lead you through the process of reviewing your options, many of which can assist you in retaining possession of your house.
Sometimes, however, keeping the house isn’t possible or feasible, in which case, preparing yourself emotionally to lose this house is often necessary.
This is particularly difficult if you recently experienced another significant loss — the loss of a loved one, the loss of control because of substance abuse, the loss of a job, the loss of your car, and so on. Looking beyond the loss to the future may be difficult when your final loss is your castle.
When we tell clients to prepare themselves to lose this house, we always stress the word this.You may lose thishouse, but you can rent a place or even buy another house later. You may be losing the place where you and your family built fond memories, but you’ll find a new place where you can build new memories. And by taking control of the situation, you won’t add the really bad memory of being evicted.
We always explain to people who are stuck in this seemingly dead-end situa- tion that it’s only a house. Of course, that’s easier for us to say than for dis- tressed homeowners to accept. After all, it’s not ourhouse. But if you think about it, losing a house is not the end of the world, although it may seem that way to you. It’s okay to feel that way for a while, but eventually, getting beyond the grief will deliver more positive results.
Taking Control of a Bad Situation
When you fall behind on paying the bills, it begins to feel as though you’re in the middle of a forest fire. As soon as you put out one fire, another one pops up right beside you. But you never get ahead just putting out one small fire after the other. You have to attack the root cause of the problem and hit it with everything you’ve got. At the same time, you have to make sure that you put the fires out for good, so you don’t set yourself up for future failure.
In the following sections, I offer two suggestions for how you can become more proactive and immediately begin to take steps to improve your situation.
The more proactive you are and the more you stay ahead of the game, the less likely you are to become subject to circumstances beyond your control.
Lawyering up with a foreclosure attorney
If you’re going to hire an attorney to assist you, do it early. If you try several options on your own first and then turn to an attorney at the very last minute, the foreclosure process may be so far along that the attorney wouldn’t be able to do anything for you. You may have already sealed your fate. You have to contact an attorney when you still have options.
An attorney once told us a story that a client of his asked him to sit in on the closing for a piece of property he was buying. Of course, that’s pretty normal, but what bothered the attorney was that his client hadn’t asked him to be involved earlier in the process, when he was negotiating with the seller. The attorney told his client, “There isn’t much I can do for you at a closing. You’ve already negotiated the purchase agreement, the title work has already been done and analyzed, the inspections and disclosures have already happened, and you’re already bound under the contract. What do you want me to do — sit in the room and watch you sign your name?” That sounds a bit harsh, but his point was that his client didn’t contact him early enough when he could have offered something of value.
Consult a bankruptcy attorney early in the process to find out about available options. You don’t need to file for bankruptcy. For a few hundred dollars, however, you can determine whether bankruptcy is a viable option. If the idea of consulting a bankruptcy attorney doesn’t appeal to you, at least pick up a copy of Personal Bankruptcy Laws For Dummies,2nd Edition, by James P.
Caher and John M. Caher, to check out the pros and cons of bankruptcy.
Sticking up for yourself
A highly qualified foreclosure attorney can certainly take many of the hassles and headaches out of the process for you, but if you can’t afford your house payments, you probably don’t have a lot of cash lying around to hire a top- notch attorney. The other alternative is to advocate for yourself. Most people have the general qualifications required to do the job:
Ability to keep good records
Ability to do a moderate amount of research Assertiveness (most people need to work on this)
In the following sections, we show you the basics of how to become your own best advocate.
Keeping impeccable records
The single most important foreclosure self-defense maneuver consists of keeping detailed and accurate records. That means recording everything that happens from start to finish. Why? Because if you ever have to appear in court, a complete record of what happened is your best defense whenever the hearing turns into a he-said-she-said event. The person with the most complete and accurate records, with each event recorded at the time it hap- pened, receives the court’s favor. And believe us when we say that the bank and its attorneys are recording everything.
The following sections describe the events and happenings that you should be recording or keeping track of.
Conversations
Use a tape recorder or digital recorder to record all the conversations you can. When it’s not possible or not lawful for you to record a conversation, take detailed notes. Keep a notebook or legal pad along with a couple pens or pencils next to your phone, so you don’t have to search for them when the phone rings. After you hang up, fill in the details of what you talked about and clean it up.
Jot down the date and time of the conversation. That way, if you need to ref- erence what was said or call someone on it in court, you can say something like, “On January 14, at 3:30 p.m., we discussed this issue. At that time, you said x,now you’re saying y.”
Documentation
Keep every document (or at least a copy of it) that you send or receive. Put a date on every letter, form, and other correspondence you send out, and write the date and time on every document you receive to note when you received it.