Dear Aurora Loan Services (a unit of Lehmann Brothers) and Citibank Mortgage (who took the TARP money):
Between the two of you, you hold my fate in your hands. In July 2005, approaching 65 years of age and having been an entrepreneur for forty years, I bought a home in Half Moon Bay, about three miles from one of my daughters. I put 10% down and got a 5-year interest-only mortgage for about $576,000 and a HELOC at prime +2 for the remainder, about $154,000.
I was really happy to live close to my daughter, and the two of us encouraged my other daughter to move home from the Netherlands to join us. For three years, everything seemed fine. I made friends, I continued to run my business in Arizona, invest in my start up companies, and assume I'd be in Half Moon Bay full time one day. Prescient about Arizona real estate, I sold my house there and rented.
And then two people on my block in Half Moon Bay had to use short sales to get themselves out of their obligations, and the value of my home suddenly dropped. All of a sudden, the home I paid $769,000 for, and then spent $45,000 modernizing, thinking I'd live in it for at least ten years, became worth $699,000.
I'm no dope; I've been in business all my life. I saw everybody starting to turn in their keys. I knew it was a bad financial decision to keep paying on the mortgage, but I was loving the house, spending quite a bit of time in Half Moon Bay as my daughter was now pregnant, and determined to make it through this momentary drop.
And then November came, and the value of my house dropped to about $659,000. More important, my business began to go away. And I mean go away. Suddenly, four deals I was in, all of them capable of making me financially secure, either fell out of escrow or went on "hold."
However, Obama got elected, and I kept on paying. I did make a call to you at Aurora in December, asking if I could get some help, and you advised me that you couldn't help me because I wasn't behind. Of course I wasn't: I was struggling to preserve my excellent credit.
Well now it's February. I am scrambling for small projects. My deals recede in the background under the weight of our crumbling economy. Congress argues over the stimulus bill. And I have taken a deep breath and realized I am going to fall behind on this mortgage.
Like Rome, I am burning while Congress fiddles. And I'm not getting any younger. I'm an optimistic person, a healthy person, and a person willing and anxious to work. No, I don't want to move in with my daughters. I want to ask you to re-finance my mortgage at the current value of my house at a 4.2% rate, like everyone in Congress is suggesting.
Otherwise, I have to let you foreclose. And this will not benefit you or me. Me, it will ruin my credit. You, it will give you yet another foreclosed property to sell at even less than if I could keep it for a few years and then sell it for you. And it will further erode the property values in my little subdivision, full of other families.
Do I want to bare my soul to you, or to the online world? Of course not. But my highest and best use right now is to offer myself as an example, a data point. I'm articulate. I'm not a person who should never have been given a mortgage. Not an uneducated victim of a greedy mortgage broker. And not a speculator. Just a person caught in something much bigger than all of us.
I'd like to take a moment to thank my parents and all my teachers, who gave me the gift of writing, so I can at least convey my feelings to the world. Namaste.
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