There's No Place Like Home After This Week

I am preparing to spend the final week in the house I “bought” in 2006, shortly before the lid came off the American economy and plunged us into a near abyss. I purchased this house with the express intent of living here for many years, improving it where I could, and passing it on to my son. I had no intention of flipping it, making it into a cash cow for my trips to Europe, or any other extraneous uses. It was my house, which I truly and deeply wished to make my home. I was thrilled at the prospect, once again, of home ownership, after being out of it for several years.

But then 2008 happened, which for me at least, forced a reckoning, a change in the way home ownership is perceived.

I got in here on a tenuous basis, I admit. There was no money down, which in and of itself should have alerted me to the fact that something was seriously wrong. I had no money for a down payment. But what I had was sterling credit, and a little room on my credit card. That was enough to secure a first and second mortgage at a fairly decent interest rate, with the assurance that, in the not-too-distant future, I could refinance the loan into an even better deal with a fixed interest rate. So I bit the bullet, moved in and set up housekeeping.

When the economy tanked, any thoughts of refinancing tanked with it. The falling interest rates lowered my monthly payments to ever more affordable levels, but the looming reality that the interest-only payments would end and with it any semblance of affordability kept me awake at night. Meanwhile, the old house began to need serious repairs. But with no ability to either save money toward those repairs, or refinance the loan for the money, the needs went unmet.

Meanwhile, Washington bailed out the banks, including the mortgage holder to this particular property. The idea, as I understood it, was that the banks were going to take that money and unfreeze the credit market, and make other funds available to offer help for homeowners like myself, suddenly faced with a mortgage twice or more what the property is actually worth.

But I apparently understood incorrectly.

I’ve been assured by my mortgage holder that, while I may qualify for a loan modification, there will be no discussion of a reduction in the amount of the loan. Period. They will be glad to discuss a short sale, but they will not, in essence, consider short selling the house to me. There is no explanation as to why this is. It just is.

So we are putting our belongings and memories into boxes, and preparing to become renters once again. And I have to say, this is a great relief. I have fought hard to find ways to keep this house, looked high and low for a solution. But in the end, I’ve been handed an impossible choice – either continue paying money I can’t afford for a home that is never going to be worth the amount of the loan, or walk away.

At some point, morality doesn’t even enter into it. Did I sign the loan agreement? Certainly. Am I walking out on my word? You could see it that way. Do I feel shame, or a sense of social impropriety? Not for a second.

A social compact is a shared agreement. It is not a one-way street. The bank has a certain amount of responsibility in this agreement as well. I sincerely doubt that any banker would have the slightest hesitation to walk away from a deal like the one facing me. To remain tied to a deal like this would be financial suicide, and would be viewed as reckless stewardship of resources. Laws are very clearly in place to allow corporations out of deals that go south all of a sudden.

And since the Supreme Court has ruled that corporations have the same rights as people, it must also stand to reason that people have the same rights as corporations.

So I am exercising my rights under the law, and waving goodbye to a terrible deal.

I wish the bank all the best, and sincerely hope they will be happy in their new home.