Dispatches from the Displaced: Los Angeles Couple Blogs Their Foreclosure

Are you facing foreclosure, or have you already lost your home? Share a story of how the housing crisis has affected you by emailing [e-mail].

This is Dispatches from the Displaced, where homeowners who face foreclosure share their stories in their own words. According to a report from the Center for Responsible Lending, the number of foreclosures in 2009 has just passed the 1,000,000 mark, and millions more are in limbo, waiting for short sales to be approved by foot-dragging banks or to find out if they qualify for assistance under President Obama's Making Home Affordable relief program -- and many who feel the pinch don't.

Stephanie and Bob Walker have chronicled their experience with mortgage default and pending foreclosure on their blog, Love in the Time of Foreclosure. Their house has been on the market for nine months, since Bob lost his job. Since then, the Walkers have had to deal with the emotional rollercoaster that is foreclosure:

Nine months ago is when this all began. That's when Bob lost his job and we knew without a back-up plan for his income, we were in trouble. Neither of us wanted to sell the house. Everything was unknown... and the fear and anxiety was definitely worse then than it is now. What the hell would happen to us? Well, we didn't know then, but many of our 'worst case scenarios' would come to pass. The house didn't sell at full price and instead sat on the market through many reductions for over 7 months where it still sits. We didn't get jobs right away. It took me 3 months and Bob 4 months. Our bank account rested in negative territory for a couple of weeks at the lowest point. And we're now selling the house in short sale with the hope of avoiding foreclosure.

Having gone through all of that I can honestly say that the fear of losing everything is definitely worse than actually losing everything. Once you're in it... you realize it's not that bad. You tap into resources you never knew you had. You surprise yourself. You realize you can handle it. Anything that comes your way. And when you turn the worst case scenario into the greatest opportunity, you give yourself a lot more room to breathe.

At one of the tensest points, Countrywide, the Walkers' mortgage company, set a sale date for the foreclosure -- even though they were still waiting to be approved for a short sale:

Here's what Bob just figured out. February 16th, 2009 our house went into foreclosure without a sale date. June 6, 2009 is exactly 3 months and 3 weeks from February 16th. By law, they have to wait at least 3 months and 3 weeks. They are foreclosing at the earliest possible date. This, I have to say, is a surprise.

...The short sale has been approved by both Countrywide and National City. Why would Countrywide approve a short sale and foreclose instead? At this very moment, Countrywide is considering two offers on our house. We just got a third offer today that we'll be submitting to them for consideration. Three different parties are trying to buy our house at this very moment. Why would they set a foreclosure date in the face of all of this? Well, perhaps it's a case of the right hand not knowing what the left is doing.

...This is what I know: we have 3 offers. 2 are already at the bank under consideration. The people who submitted these offers really want our house. Our Realtor is telling us not to worry. That the short sale will come together and this date of foreclosure will all be moot. None of it will matter. I want to believe this.

Another thing I know: it will all work out. I don't know how. I just know. In the meantime, we will do everything we have to do to make sure this short sale comes together. Foreclosures don't benefit anyone.

June 9th (the auction date), by the way, is 10 days after our 6 year wedding anniversary.

As of just a few days ago, things have been looking up for Stephanie and Bob: their short sale has been approved by both their first and second mortgage companies, and they are on track to avoid a foreclosure.

Are you facing foreclosure, or have you already lost your home? Share a story of how the housing crisis has affected you by emailing [e-mail]. And sign up here to receive updates about our foreclosure project.

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

Comments

[jalowe1957]

Trust me, it will take more than a bucket full of Janitor in a Drum or even Mr. Clean to clean up this mess.

[Flavor]

I don't get this, you mean you would rather the homes go into foreclosure than allow them to sell, something ain't right with this picture. The banks have too much power and this power is not to help people in their time of need. This is awful, the not knowing this couple with thru, the non support they clearly did not get, all I know is the people will never forget how they were treated during these trying times.One of the bloggers said he holds the president responsible, not so before president Obama got into office (while) President Bush was still in office there were seven foreclosures on my street and this was Feb 2008. President Obama inheirted this mess and this man has tried and is trying to do the best he can, we all know that he stated this help that he has come up with will not help everybody but he clearly said, who it will help. If anything the president has done something, in his short time of being president. What has happened is the banks have not stepped up to the plate and actually tried to negotiate and help one's who may find themselves in foreclosure we have clearly seen this in the article. One wonders why you would want foreclosed homes?

[dcrinaz]

Whom are you addressing? Who is advocating foreclosed homes?

[RJII]

some banks. I've heard numerous stories on my support group saying their bank (Chase in a lot of blogs) won't modify, short sale, etc.
I'm guessing the gov't banks TARP monies for negative assets, so there isn't the urgency to work with the homeowner.
I saw a special on how the banks lobbied against "cram down" allowing the judges more authority to negotiate loans in bankruptcy courts.

[dcrinaz]

This could have been stopped in April--the vast majority of foreclosures could have been stopped in April of this year if all the Republicans in the Senate and 11 traitor Democrats had passed bankruptcy reform with cramdown, which would have forced banks to meaningfully renegotiate home loans to keep a bankruptcy judge from doing it to them, and giving them even worse terms

People could have stayed in their homes, and with renegotiated lower payments, it would have provided money that could have been redirected to retail sales and other spending. Tax revenues would not have fallen, there would be no neighborhood blight, and home values would not have dropped so drastically. And banks would not have lost any money.

What the banks are doing is insane, is bad business. They are losing huge amounts of money in foreclosures, which they would not be losing at all if they honestly renegotiated loans. But since Uncle Sam is giving them bail-out money to make up for their insane business practices, the will keep on foreclosing.

The bail-out money is what is letting them pursue foreclosures, or they would have had to go belly up. This has to be one of the reasons they told their lapdogs in the Senate to kill bankruptcy reform. Because if homeowners were paying and staying in homes, even at lower payments, the banks would not be losing money at all and they would have no reason to be getting bail-out money.

[mbaty]

Why would the lenders want all these houses foreclosed? I fear the answer is more sinister than we know yet, since it doesn't seem to benefit anyone. Why not renegotiate or work out something with the homeowner? Financially that seems to be the smart way to do things. So why are these lenders so eager to foreclose on..what, over 1,000,000 homes now? Where is their incentive? What is their incentive? It is illogical, and therefore, the real reason must have logic for the lenders. The true motive must be something so horrible that we haven't thought of it yet.
Maybe they are attempting to be so evil that we eventually form an ecomony that guarantees every person affordable shelter as well as clean water and food and transportation and health care--and to determine how we value these things beyond money. They certainly aren't trying to keep things "status quo." But it will be our job to make these radical changes happen in the real economy after they've apparently bankrupted everyone through usurious debt.

[DorianA123]

Hi Mbaty -
You've hit on one of the big questions that haven't been answered. Here's a few facts.
IndyMac refused to rework our mortgage because we've been able to make our payments. When I pressed them they admitted that Deutsche Bank holds our note and they are just servicing it. Deutsche Bank is allowed to set the rules and they say not to renegotiate loans for borrowers who are current.

My understanding is that any bank that received bailout or TARP money had to agree to modify mortgages under the government's plan. That plan specifically encourages banks to modify mortgages for at-risk borrowers before they go into default. IndyMac and Deutsche Bank both got federal money. The Wall Street Journal says: "AIG has put in escrow some money for at least one major bank, Deutsche Bank, whose hedge-fund clients made bets against the housing market. The money will be released if mortgage defaults rise above a certain level." It seems to me that Deutsche Bank has a financial incentive to keep foreclosure rates high since they benefit even more from taxpayer money if defaults increase.

Until the media starts to cover this and pressure the weak-kneed politicians to pressure the banks then the foreclosure rates will stay as high as they are now or even get worse. Dick Durbin said the banks own the senate and the voters need to make their voices heard for that to change.

[tralfas]

One of the reasons is that a borrower in default of a mortgage is likely to be in default of a renegotiated mortgage. Banks understand that the earlier they can sell their collateral, the better. To do that, the bank needs to foreclose on the house. If they re-write a mortgage and six months later the borrower is delinquent, which is often the case, then the bank is right back in the same place, except now they will be selling a foreclosed home into a worse market.

[hill raiser]

om your lips to Congress' ear! A comprehensive plan for a sustainable America. I would add two more items to the agenda: eliminate paid lobbyists in Washington and level-fund all campaigns for election to public office. In the age of the internet, there

good finance articles-> http://www.alexandria.lib.va.us/link/redir.pxe?iamned.com

[dcharles87]

if you are on the verge of foreclosure and curious as to what the process is you can find out here:
http://www.bankapedia.com/mortgage-encyclopedia/faqs/530-how-long-before-my-property-goes-into-foreclosure

This reminds me of the kid who had a blog about foreclosing on the 6 or so homes he bought during the boom- I think it was iamseekingforeclosure.com or something. He eventually sold the site for a decent amount- but not enough to bail him out. Wonder what happened to him.

[dcharles87]

link didnt work oops: http://www.bankapedia.com/mortgage-encyclopedia/state-mortgage-laws

[dcharles87]

T
If you want defaults down- FHA needs to up what is required for down payments. People in this country need to stop getting a free lunch. It needs to gradually increase- 5% to 10% at least. Right now its 3.5% - which just isn't enough. People need skin in the game

On a state level- they need to to crack down as well. every state is different and while some have decent - for others its the wild west- Alaska for example. I came across this site which details every states lending laws:

State By State Lending Laws

[TJCole]

Just remember when the corrupt bankers take the house they can only sell it for the current market value...what it's worth today, not the original mortgage value or amount...

Now if these corrupt bankers were to allow these folks to reset their homes and mortgages at the current value of the home and give them a fixed rate the vast majority could remain in their homes millions of foreclosures and evictions averted...!

Why won't this president tell America this, and pressure our corrupt bankers and baking system this simple truth...

These bankers dare invoke moral hazard, imagine the nerve of these lying thieving bankers..invoking any morality...thy are completely immoral...!

[davidwayneosedach]

Let us hope that Geithner's NY house makes it one million and one.

[proggirl]

This does not relate to this story, it just bugs me.
M is the Roman numeral for 1,000. It should not be used to represent 1,000,000.
Okay, carry on.

[elaygee]

They spent money like drunken sailors (first and second mortgages and an expensive house they didn't need but WANTED) and then woke up with a hangover and huge debts. Nobody did anything to them, they did it to themselves.

[sexyrexy]

your kind of comment is getting so boring by now-- have any idea what kind of fraudulant tactics these brokers/lenders have done to get to this point & mess ??!

this is not self-inflicted.

[TJCole]

This is a national disgrace and I hold this president in contempt for his disregard for millions of Americans and their traumatic needless suffering...!

This make Katrina seem nominal in comparison..!

[Wendy Dyke]

You hold THIS PRESIDENT IN CONTEMPT????????

Hey genius this started well before the election... like 3 years ago. Try blaming the real culprits... the bankers and previous administrations (as in the last 3).

[sexyrexy]

how about the seeds of this housing crisis came about in 2001??? onwards..