Your Voices: Military Family Faces Foreclosure

This is the second installment of Dispatches from the Displaced, in which one homeowner shares his or her story of facing foreclosure to represent the over 10,000 houses that are foreclosed each weekday. Read yesterday's story from Connie in Queen's Creek, AZ here.

Have a story on how a home foreclosure has affected you, your family or your friends? Send it to us at [e-mail], and sign up here to receive updates on the feature as it progresses.

Today's testimonial comes from a military family. Carol Ann Smith has a son serving in Iraq and a husband who served in Vietnam.

I have a daughter who is mentally ill and my husband and I are raising her two children. The cost of her treatment and the care of the children made it difficult to pay the bills. My husband taught Algebra and Geometry in the public schools and I am a second shift computer operator.

In desperate circumstances we refinanced our home with HSBC at a 12% rate, thinking that we could refinance in a year. Then, my husband had a stroke and had to take early retirement. We quit paying our mortgage and filed bankruptcy.

HSBC has offered an 8% rate, but they added $18,000 to our $180,000 mortgage, raising the loan amount to $208,000. The house would not appraise for more that $180,000.

We received this offer in a letter. The payment is still too high. I have tried to call HSBC and left at least 20 or 30 messages, but they do not return my calls (we have signed a waiver through our attorney allowing direct contact.) If they would work with us on the payment, we would be able to stay in our home. It is just frustrating that they won't return my calls.

No one placed a gun to our head and made us make this terrible loan, but we are willing to pay back every cent if they would only lower the rate to make the payment something we can afford. Otherwise, HSBC will own a home that needs quite a bit of work, in a neighborhood where several homes are already for sale.

My husband is a Vietnam veteran and my son is currently in Iraq. We are good citizens that have faced life changing events. I pray for everyone going through the anxiety and stress of losing a home. Ultimately, we are all in this together.

Today, while Smith stares down foreclosure, over 10,000 people will lose their homes. Today also marks the launch of the Home Defenders campaign run by the Association of Community Organizations for Reform Now, or ACORN. Homeowners in seven cities across the country, including New York and Los Angeles, have banded together to fight foreclosure with acts of civil disobedience. These so-called homesteaders will risk arrest by staying in their homes while banks and law enforcement inevitably attempt to throw them out.

Share a story of how the housing crisis has affected you by emailing [e-mail]. And SIGN UP HERE to receive updates when we publish new stories.

For testimonials from these homesteaders and others facing foreclosure, take a look at Brave New Foundation's new site, Fighting For Our Homes.

Find out more about Dispatches from the Displaced, HuffPost's Eyes&Ears series of reader-submitted foreclosure stories.

Comments

[Rog49Thomas]

Send them off to needless wars to get killed or maimed.
Don't provide them sufficient or adequate equipment while they're fighting.
Send them back again and again for repeated tours of duty.
Have no plan for exit from the conflict.
Sneak the bodies of fallen heroes home in the night.
Cheat those that return living out of proper post service medical care and benefits after they return.

And now throw them out on the streets.

What is it that I don't understand about "supporting the troops"?

A nation makes a sacred contract with its military personnel.
A nation that breaks its sacred word isn't really much of a nation.

[Jim Perkins]

You should contact your local rep and both senators. Also see what your state veterans service can do to help. If you are a member of VFW, DAV or other service organization, you should also contact your post and state leaders to find help.

Check your non-profit listings to find any organizations that could possibly help you somehow. Also check National non-profits as well. I will do some surfing to see if I can find anything. You can leave a message on facebook for me, if you want to.

I'm a Vietnam era disabled veteran and have been dealing with the government for 34 years. I have traveled the minefield of the US GOV Bureaucracy for 34 years or so. I'm also a political junky that does lobbying and campaign work. I have no idea if I can find anything to help. But I know some people I can call and check things out.
I truely wish that I could do more to help.
I have an idea of what you are facing. I was homeless for 6 years and spent 3 winters living on the streets of Boston. I only had to worry about myself. I know it will be so much harder for you and your family.
You will be in my thoughts and prayers. Take care and be well.

Jim

[sheikwil4]

That's a shame, these people are fighting for us in other countries to keep us protected and they are losing their jobs, homes and marriages. It is pitiful how little the military pay unless you are an high ranking officer. I thank God my son is done with the military because I couldn't afford for him to be in the military because I had to support him most of the time he was in the Army. I had to pay for his plane tickets home. Thank God he has completed the time he signed up for

[Luvial]

Welcome home, bro.

[KYThrill]

I also don't understand this entrenchment mentality in these extreme cases. Here is a family with a heavy debt load from a medical condition. A bank's job is to make money for its shareholders and not play white knight and ride in and give people houses for cheap. With maxed out cards and other loans, I can understand why a bank can't give them a more favorable loan.

It's sad they are in bad shape, but a bank's job is not charity.

What I don't understand is why do people stay in these situations they can't afford. Move. Get out from under that house you can't afford. There are many rural areas of this country where a decent 1500 sqft, 3 bedroom house can be purchased for $75,000. With three adults and two children, it would be tight, but workable. Why stay where you are at? I don't get it. Admittedly, it may be too late now with unemployment on the rise. It may be hard to find work if you move. But this wasn't the case a year or two ago.

I do sympathize with this family, but I think the solution to their problem should be found in the charity of neighbors, family, and community. The solution shouldn't involve banks or mortgages.

[maddie0001]

A bank's job is to make money for its shareholders and not play white knight and ride in and give people houses for cheap.

Why is the taxpayer's job to bail banks out of their foolishness? They're the ones that made the loans, this woman's times a million. Maybe the banks should rely on the charity of other banks.

[Mahi Joe]

You could not be more correct in your rebuttal. People forget that those people who are still employed struggling to keep or actually losing their homes are those same people who pay their fair share of taxes which goes in part to bailout the same banks that are foreclosing on their homes.

[kudzumaster]

I don't hear this family asking for any sort of handout--simply a reasonable payment so that they can take care of their own debt, and keep themselves, and the bank, from losing money.

Trying to negotiate a more reasonable usury is not asking for charity. It simply a request for a little common sense from the bank.

[Mahi Joe]

"I do sympathize with this family, but I think the solution to their problem should be found in the charity of neighbors, family, and community. The solution shouldn't involve banks or mortgages."

I do sympathize with the failed banks, but I think the solution to their problem should be found in the charity of neighboring banks, family and shareholders. The solution should not involve the taking of taxpayer's money to support failed private institutions whose CEOs continue to live a lavish lifestyle.

[KYThrill]

Well, I can certainly understand wanting to take care of your children and grandchildren. And when a genetic illness is involved that you can't prevent (assuming you weren't smoking and drinking while pregnant), then what can you do? You go in debt up to your eyeballs and hope for the best.

I don't think this story really exemplifies the mortgage crisis as much as it does the health care crisis in this country.

I guess this story raises some questions. If your daughter is diagnosed with a mental illness, then you should have been able to draw an assistance check when she was a minor, and when she became and adult, she should have continued to get the check. She should also qualify for Medicaid. This should pay for any approved treatments, so I'm not sure where the medical bills are coming from.

Also, if her illness is severe, you could have your daughter declared unfit and take custody of the children from her in court. Then as the foster parents, you should be able to draw an assistance check.

I know those wouldn't be easy steps or something you would want to do, but sometimes you have to do what you have to do.

[any67ways]

it's quite apparent that this family's troubles were highlighted for this article because they fit into several categories that should warrant our sympathy. Family members in military. Family member ill and let down by the health care industry. Family in forclosure.

And, yet there are still trolls out there who can't seem to sympathize.

Like hot air balloon, Rick Santeli of CNBC, trolls are still blaming unfortunate home owners, when it's the elites who drove our economy into the ditch who should be blamed.

[yappnmutt]

i sympathize with these people but their issue has nothing to do with the housing crisis. this family has been trapped by our most inefficient in the world healthcare system. that's another blog.

[any67ways]

agreed,
but, when 90% of TARP money is being allocated to the institutions that caused this mess and only 10% to underwater homeowners, i hope you see my point

[yappnmutt]

here's a story for you. i saw this coming in 2003 when home prices disconnected from the historical ratio with income. i sold my house, found a place that had not yet appreciated in value and paid cash for it thanks to the proceeds from the sale of my former house. with the freed up money i replaced my 1990 colony park station wagon in almost mint condition with a brand new van i intend to keep until it dies or i do. i put half my money in gold waiting for the present circumstances and still hold it. since the beginning of 2007 i have used the rest of my money to short, first, the home builders, then the mortgage bankers, then the big banks and the last big short was las vegas sands. now i'm shopping for foreclosed homes. i still own my van and my little 1800square foot 3/2 60 year old home.

i learned this is the way to go after taking reality classes in making a living from the 70s. man up. the rest is just whining.

[BuzzingAlong]

Well bully for you. Not everyone is as brillant as you.

MOVE ON and shut the f@%k up.

[yappnmutt]

not brilliant ,just informed.

[any67ways]

here's the article i read back in '05

http://www.counterpunch.org/whitney07272005.html

wish i woulda had a house to sell, but I'm glad I came across it, because I was looking to buy a house back then

[yappnmutt]

even then most people probably called him crazy.

[casdem1]

I am Carol Ann Smith and the story is mine. I believe there are a lot of people hurting around the country and I do not believe that my problems are worse or harder to bear than that of many others.
We have lived in this house for twenty-one years and have refinanced twice. Both times have been to pay medical expenses related to my daughter's illness. Mental health treatment is expensive and since there is no 'cure', it is an ongoing expensive process. When we applied for the last refinance and received a rate of 12%, we did not have any late payments on bills, but we were maxed out on six credit cards and had two signature loans. Our debt to income ratio was the reason for the 12% rate, though I admit we were so desperate to not default on any bills, that we accepted the refinance and planned to fix that horrible rate in a year. However, during that time my husband had a stroke and we were unable to refinance
We would like to pay the debt we currently owe and not add to the foreclosure crisis. HSBC is offering 8% for 16 years after adding $18,000 to the note. We would be happy to work out something with them, but I cannot get anyone to speak with me.
We are not asking for a gift, only an opportunity to pay our mortgage with a little compromise.
Thank you, Carol Ann Smith

[soldiergirl]

Carol, I am really hoping and praying that all works out for your family and that you'll be able to keep your home. Please don't let the negativity of others discourage you. Any one of us could be in the same boat at any time, in this economy. Don't give up. Keep calling HSBC until you wear them down. What you are asking for is not unreasonable, especially given the financial environment that we are living in now. May God bless you.

[AngieMom57]

Thank you for sharing your story.

There are always going to be those that seem unkind and I hope you have the strength not to let those self-righteous people concern you. As a race we should take this challenging opportunity not to "dis" on people who are struggling (right or wrong); encouragement is a win win situation. Any of us could easily chose to sympathize or even help, knowing full well "that but for the grace of God go I."

I still have this reaffirmed feeling that the economy challenge is just a preview of the ecology challenge that is looming if not down right upon us just not getting the attention right now.

[1liberalconspirator]

I'm praying for you as well. I understand how hard all this must be for you. Please consider contacting the VA and trying to utilize their program as detailed here:

http://www.homeloans.va.gov/docs/home_loan_enhancements.pdf

Or, seeing what else they can offer you. I don't know if it will help you or not.

Your in my thoughts and prayers.

[BuzzingAlong]

Carol Ann, you really owe no one an explanation for how your circumstances came about. Most normal people understand that sometimes there are circumstances that we can't control which leads to much worst circumstances.

There are hundrend of thousands of people going through what you are going through and many more just a pay check away from that.

But these are some people who can't think or see what is past their own nose. That is until they find themselves in trouble. Some people just lack that quality that makes humans human.

As my grandmother used to say "what goes around comes around".

[1liberalconspirator]

I am so fanning you BuzzingAlong!

[1dogs2]

Hang in there, Carol Ann. My guess is that a vast majority of people in this country are one pink slip or medical disaster away from your situation. Help appears to be on the way; I hope it doesn't come too late for you as it has for many others in similar straits.

[Pupster]

Small pedantic correction: $180K + $18K = $198K, not $208K

Sounds like 1) this was a sub-prime loan to merit a 12% rate and 2) it's also a zero down loan, if the amount of the loan is equal to the entire worth of the house. The $18K that the bank wants to add could be a combination of re-financing fees plus projected interest by lowering the monthly payment and reducing the rate to 8%.

This is also exactly the type of situation that can be helped by the bankruptcy bill, but extending the life of the loan but lowering the monthly payment to a more manageable size. That said, reducing the rate from 12% to 8% is a substantial cut. How much lower does the borrower expect, I wonder?

[1liberalconspirator]

12% was absurdly high it's twice the national average 30 yr from bankrate.com... 8% is a substantial cut I'll grant that but needs to be better to alleviate the mortgage crisis. I don't know where she lives or the other assorted factors but I would rather we refi around 5 for people-then let the banks gorge themselves on the spread. It's not business as usual.

These banks are an oligarchy-they set the prices-not the market. Nationalize them and break them up.

[jamie461]

If someone offered me a 12% mortgage rate in the current climate, it would only be because I had horrible credit. Is it realistic to expect banks to offer prime rates to people who have a history of not paying their bills??? NO, it is not. Under the circumstances, instead of taking a 12% refinance, they should have sold. Now they are being "offered" an 8% loan at a time when people with GOOD credit can get a 5% loan. That tells me that this is a couple who cannot pay their bills.

I'm sorry for their misfortune, but this is not the fault of HSBC or any other bank. This family should not be homeowners. It IS okay to rent.

[1liberalconspirator]

No, they can be helped. It's odd that the bank in question is trying to cram horrible terms down their throat when they can be helped elsewhere. Why not refer them out to another program instead of exploiting them? What is actually stupid is that you want to play the my FICO score game and babble on about people that can't pay their bills-but you don't want to help someone that has served their country!

They need to contact the VA and get some help.
http://www.homeloans.va.gov/

http://www.homeloans.va.gov/docs/home_loan_enhancements.pdf

"Enhanced VA Mortgage Options Now Available for Veterans
Of Potential Benefit to Those in Financial Distress
WASHINGTON (Oct.24) -- Veterans with conventional home loans now have new options for refinancing to a Department of Veterans Affairs (VA) guaranteed home loan. These new options are available as a result of the Veterans’ Benefits Improvement Act of 2008, which the President signed into law on October 10, 2008.
“These changes will allow VA to assist a substantial number of veterans with subprime mortgages refinance into a safer, more affordable, VA guaranteed loan,” said Secretary of Veterans Affairs Dr. James B. Peake. “Veterans in financial distress due to high rate subprime mortgages are potentially the greatest beneficiaries.”

[1liberalconspirator]

Matthew Palevsky, you know these people-hook em up with the VA if you can.

[Pupster]

Why do you think it's horrible terms? A reduction from 12% to 8% is a substantial cut that will save the borrower a lot of money over a 30 year period.

[casdem1]

Thank you for the information, I will contact them immediately.

[BuzzingAlong]

jamie461, did you even bother to read the story to LEARN how/why this family got into trouble?

Now just shut the f*%k up and go read and this time try to LEARN something.

People like you make me want to vomit.

[1dogs2]

Could it be the fault of the American health system that bankrupts hard-working people like these who bought a house 21 years ago and paid their bills and raised their children and then undertook to raise their grandchildren while paying for their adult child's medical care? Could it be that the current problem could be worked out if anyone at the bank would TALK to them? If they charged the normal interest rate? If they didn't add another $18,000. to the principle? The bank's intransigence harms not only these people, but their neighbors and most idiotic of all -- the bank itself, which will be left with an unattended property that may take months to resell -- not to mention the rest of us who will no doubt have our tax dollars used to bail out the bank for its many other short-sighted choices.

[texanna]

I'll bet the head of the bank that holds the mortgage has a "Support Our Troops" magnet on the back end of his Caddy SUV.

[jamie461]

Yeah, it's the bank's fault that these people made stupid decisions.

[1liberalconspirator]

How do you know that they made a stupid decision?

[HighPlainsJoker]

It is partially the bank's fault. They were unregulated, many of them thought they were, and thus were able to make bad loans on over valued houses, because they thought they were avoiding risk with derivative loan combinations. The kept the bubble alive. They encouraged bad loans. They fed the feeding frenzy.

[CranialRectalLoopback]

I'll go shopping to show my support for the military. Maybe I'll buy their foreclosed home.

[contracttracker]

If the family in the article were renters and they suddenly could not pay their rent, they would be evicted with no fanfare or sympathy articles in a matter of weeks. The fact that the mortgage cannot be paid is no different, and it appears the "owners" had no more equity in their house than a renter does in an apartment. I am sure there are evictions occurring in their town and state at a prodigious rate and those persons' stories are no less unfortunate. There is no public outcry for "renter's rescue" government action. Nor would such action, if called for, be appropriate. Can't pay the rent, gotta go. Sometimes people just have to cope with loss of income by lowering their standards. If a family loses an income earner, as this one did, and can no longer meet its budget, it may have to downsize and apparently this one needs to. This may involve moving to a cheaper abode. The fact that the family facing a stress common to many of us also happens to have military affiliations seems irrelevant to the discussion.

By the way, there is a federal law that prohibits foreclosures against active military personnel. The headline suggests otherwise and is misleading. The articles' scenario could not be happening to the son who is in Iraq.

[findmind]

It is not just about this family, it's about all of us. For every house that goes into foreclosure it effects the entire neighborhood's home value's. Until they stop the bleeding....we will ALL continue to lose equity in our homes. I have lost 80,000+ dollars on my home in less than 2 years.....and there doesn't seem to be a bottom.

[1liberalconspirator]

"By the way, there is a federal law that prohibits foreclosures against active military personnel. The headline suggests otherwise and is misleading. The articles' scenario could not be happening to the son who is in Iraq."

-Nope, I know people that banks have tried to do it to. That's right, active servicemen and their families. You have to invoke the law and fight with some of these banks to have them honor it that is the pathetic truth. They will focus on the bottom line no matter the cost to others or the country.

Second, if the note is held in the parents name, I don't think that they would be protected due to his current service. The VA could help these people but curiously they don't tell them that they could be helped elsewhere.

I also know of cases where these banks try and collect money from the family members of the recently deceased and try to misrepresent the legal responsibility that they have to the bank for these unsecured debts.

[BuzzingAlong]

A BIG CLUE:

The parents ARE NOT active duty military. The father served in Vietnam and is not active duty. The son, who is in Iraq, is not the home owner with the mortgage.

[maddie0001]

How does it benefit the bank to foreclose on a house, let it sit empty or get vandalized, and eventually sell it at $100K instead of reducing the loan to $180K and working with the present owners?

[spartanmom]

In 1963 my father lost his job. He walked into the local bank, explained the situation to the bank president and walked out with one thousand dollars on a hand-shake.

By 1982 that bank was bought up by Marine Midland. I worked for them for a while but in 1996 after I had left and they had morphed into HSBC, I ran into a bit of trouble and they were HORRIBLE to me--to the point of publicly humiliating me in one of their branches.

I am not at all surprised that those vultures are not dealing with this woman. They are a beastly organization.

Try to keep your business with local banks, or better yet, credit unions.

Big banking is not your friend.

[jamilk99]

This is crazy - they took a gamble by taking that deal on the hopes they would be able to refinance in a year. Why should we pay for these peoples' mortgage?

My neighbor had a pay cut so he got a second job and his wife is working too so that they can make their payments. They tried getting a lower rate but were told no they don't qualify because they're not in foreclosure. He tells me he thinks maybe he shouldn't pay for a few months just to scare them into giving him a better rate but he doesn't want to ruin his credit.

This is the hypocrisy - if you work hard to keep up on your payments, you're told "good job, keep working hard" but if you fall behind on your payments, you're told "no need to work, here's some money so you can catch up on those payments. And when you fall behind again, just come back for more."