Making homes affordable fails another young couple

On a personal note, I feel terrible about this couple's situation. It seems they are in a very tough spot. But for the benefit of others, I have to mention the white elephant in the room: was it a really a wise decision to purchase a condo in Boston when prices are obviously falling and the professional employment picture is bleak? Just because you have young kids and some savings doesn't mean the time is right to buy a house. This couple could have rented a place to live (sorry Rona, but I don't buy your claim to the contrary) and kept their savings as a cushion for when tragedy struck. Oh well... Another expensive lesson learned in the school of hard knocks.

P.S. My guess is H got a new job to pay the mortgage and his employer is paying for school.

So here we have a couple who appear to be financially responsible as evidenced by their ability to save for a 20% down payment and have their housing costs less than 31% of their income, and they have fallen on hard times.

So how is the real estate market going to bottom and turn up when people like H And L become a victim to the economy?

(I do agree with Lance that waiting was still the better financial decision.)

So Lance, when would be a good time to buy? They have a need for more space; they have ample savings; they can afford a convention loan with a full 20% down payment; they are buying a property that fits well under what lenders prefer in terms of debt-to-income; on top of that, prices have come down.

If that scenario is not a good time to buy, I don't know what is. In hindsight, we can see the economy collapsed and layoffs were rampant, but in the summer of 2008, plenty of companies were still going strong, and layoffs were not so common. If you think of your home as a place to *live* and not as an investment, then lower prices = great time to buy. Only if you are expecting an appreciating investment are falling prices a problem. This family was thinking, it seems to me, of their home as a place to live. They were financially conservative in their choice.

Besides, as this blog says, they did not fall behind on their payments -- one reason they were rejected from loan modification. That means they were so conservative in their finances when they bought, that despite job loss, they have been able to stay current on their mortgage. Doesn't sound like hard knocks or tragedy. It sounds like careful planning and conservative choices. Would they have had more money had they kept renting? Sure. But this is not a tragedy.

I sympathize with the difficulty of finding suitable, affordable rentals in Boston with young children. It is a reality that the opportunities are indeed dramatically, unjustly limited by discriminating landlords. But, that's a separate topic. Regarding their immediate financial issue, the Wall Street Journal ran a column by June Fletcher on Aug. 7th offering advice to a Chicago condo owner in the same financial boat, entitled "Help, We're Underwater." Search on that in Google News to find it easily.

I do agree that they should feel frustrated about the program. I tried to get help with our mortgage before we begin having problems. the lady at the bank (our servicer) told me they couldn't help us until we decreased our debt and raised our income. I have been unemployed since January, but we have managed to keep up with our bills. I explained to the lady that my husband was on disability and that I couldn't find a job but she said they couldn't help us.

They stopped paying their mortgage and are living rent free until Chase gets around to foreclosing on them?

They moved in with family and rented their condo out at a $400/mo loss, which is much more affordable than the $2200 monthly payment (PITI+condo fee).

the lower prices are because of the fault of the government. this couple didnt over spend my any means as some have so they are the ones that should be helped becaus eof the governments failure to control risky loans to begin with... yes go research it.. the government made it law that they would fine banks if they didnt give out XXXXXXX amount of risky loans they should bail out the people not free money but very low interest rates at the b2b level 1-3 %....

My Exxon stock was down 33 cents yesterday, but I doubt I'll get any sympathy. These people are no different, they were speculating the value of the property would go up, they were speculating they would keep their jobs, and they were speculating thay they could satisfy their future mortgage payments. These are markets at work, I guess Obama and the "bail me out" crowd, just can't grasp this.
Although Obama's motive as President is purely political (i.e. garner votes).

the right time to buy or sell is when you need to -- if you spend all your time trying to time the market, seriously you will never find the right time. kind of like having a baby or getting married....

but seriously, i think we, the taxpayers, should take all that bailout money BACK. i have heard so many stories from people i know -- who are NOT in trouble -- and of course it does not financially benefit the banks to get you into a lower interest rate. banks are not there to take care of people. they should have been given the money after they do the work, not ahead of it -- what is the incentive for them now?

i will be curious to see how your young family managed...

yes go research it..

No, you go research it. You don't even know the difference between a depository institution regulated by the CRA--a bank, in fewer syllables--and the now-bankrupt nonbank mortgage institutions that made the overwhelming bulk of subprime loans. Nor do you seem to have any idea that both Alt-A and prime loans have been distress for some time now, and no commentator is silly enough to refer to the "subprime" crisis anymore. We have already covered this subject in depth on this blog, and don't need to go over it again to fill in your knowledge gap. That's your responsibility.

Back to Rona's post: I wonder what would have happened if this young couple had read, and followed, the advice they could have found on this very blog at the time they bought.

Why should anyone be helped? It's not my problem if one of them lost their job. It's not my problem that they bought a condo- in the SUMMER of 2008...not during the peak- it's their problem if they purchased during what was fast becoming a very shaky and unstable job market. It's a gamble. It's not my problem that 1 lost their job and now all of a sudden they wanted to see if they were eligible for free lunch.

We purchased our home in the summer of 08.

I lost my job in January..I got a NEW job, in a completely different field, for the same amount of pay in March. No collecting of unemployment. I received enough $ from my former employer to continue to make our payments and to buy some 'things."

People forget how to pick themselves up by their bootstraps. I'm really over all of this oh woe is me routine. If you lose your job that pays 100k you go out and find 6 jobs to help yourself if you can't find a similar job in your field.

Nobody is safe from job loss- I learned my lesson, I thought I was safe and I wasn't. People need to factor that in when making the decision to purchase a house. If you can survive on 1 income and pay your bills great. If you can't and you lose your job...Mr. or Ms. Unemployed better be filling out those grocery store clerk and McDonald's applications.

Dunkin' Donuts is always hiring. No excuse to try to get your loan modified after only a few months of home ownership

I'm with #7: they rented the place and moved in with someone's parents. They might be taking a monthly loss, but one that's far more affordable than a full PITI.

jlen (#3): The right time to buy (as opposed to rent) is when prices are reasonable, and there is time to make a thoughtful decision based on a long term plan. The wrong time to buy is when prices are high and falling and the potential buyer is under considerable pressure to move (wife with new baby + no working toilet = I totally understand this guy's pain!) The fact that prices had come down a bit in 2008 when they bought is irrelevant. As was easy to see then-- and as we know now-- prices were clearly headed lower... And they will continue to fall from here. Bottom line, unless you can get a screaming bargain on a property (think: 1997 prices or cheaper), anybody who has a choice in the matter is much better off renting in this market. Plain and simple.

To H and L, because I know you're reading this: Would you care to weigh in on your decision to buy? Was it a good one in retrospect? If you had it to do over, would you do anything different? Should you have rented instead? Any advice for others in your situation (or similar) who are thinking about buying right now? Let's hear it... Fire away in the comments box.

I feel terribly for this family. My husband and I have a 3 year-old son and we're expecting our second this winter, and we can certainly sympathize with the process of finding suitable housing for our family. It has to be devastating to be in the situation in which this family finds themselves.

I will disagree with you, Rona, that child-friendly rentals are hard to find. We moved to the area not long ago and found MANY rentals that met and exceeded our needs. We ended up with a 3BR/1BA duplex at the end of a cul-de-sac in a family neighborhood in the northwest suburbs for $1400/month.

I think the difference, however, is that we're willing to live outside of 128. That might not be reasonable for this family. Regardless, we found at LEAST five rentals that were equal-to or better than the one in which we're currently living.

Granted, it took some hard work and time to find them--but the payoff has been immeasurably beneficial:

We don't feel rushed to buy.

jlen,
Lance is correct. Just because this couple had some cash available did not make it the right time to buy. They probably bought into all those HDTV ads that ran last years about being a great time, and I'm sure the realtors fed them all that hype about the market recovering soon. I disagree with your insinuation that the warning signs were not there in '08 even with all the news about the historic rate of foreclosures, trouble with the lending industry, and a housing market that was/is still in freefall.

One more thing to mention about this story. This was a couple that did have more cushion than most folks. If they failed, what does that still say about fundamentals still being out of whack? Like I have said many times before, this housing market is nowhere from leveling off until price/wages reach historically rational levels again. If a couple like this got into trouble how many more folks out there who bought during the runup do you think are facing the same problem? That is something scary to think about.

We couldn't live in a hotel forever! We were coming from living out of the country. We couldn't get anyone to rent to us, even when H was still gainfully employed. We looked for months--H didn't get a job at Dunkin Donuts, but we went to the toilet there as a family of four, since ours didn't work. Eldest kid was starting kindergarten and needed a "forever home." The amount of mortgage paid monthly is equal to monthly rent payments on mentioned-sublet-apartment with non-functional toilet (not including condo fees (500 paid quarterly). Just a few clues here. I don't miss "holding it in" until we could make it to D&D....and forget about cleaning up "down there" as recommended after labor and delivery at a public toilet. Pretty icky.

People are speculating because the story we have been told doesn't make sense. It is patently untrue that absolutely nobody will rent to a family with kids in the Boston area; plenty of kids here grow up in apartments! Nor is it credible to claim that the only possible choice is between an overpriced condo and an apartment with no toilet.

You're leaving a lot out. So people have a right to speculate.

I lost my wife to cancer abn she had a good job, no insurance. I lost my job while I was taking care of her. My two sons have chronic disease and 1 has had 12 surgeries. I have a lot going on but I still have some income, just a lot lower. Wells Fargo just gives me the run around and will not lower my mortgage, even though they took taxpayer money to do it and stay alive. Banks have failed because of their own greed and took us with them. They will all end up like the Royal Bank of Scotland, which the British people now own. Our banks failed because of poor management, always wanting to be bigger but not better.

I agree with Marcus:

1. It's absurd to think that you can't rent an apartment with kids. And I am sorry, not everyone gets a "forever home" for their kids.

2. If you didn't see the market collapsing in the summer of 2008, you obviously didn't bother to do even the most cursory research. The market was already tanking by then, so you had to know that you were buying in a declining market, and by buying a condo, you were taking on even more risk than a SFH (in as far as they've historically tanked harder and faster). And buying into a declining market basically means that if you lose your job, and you can't make it on just your spouse's income (if any) they you will have a hard time selling. Duh.

3. No matter what you think about the government's attempts at softening the downturn, at the end of the day it's more about protecting bank assets from free fall depreciation and insolvency than about truly protecting individual homeowners. That said, there really never has been nor will be any government solution for a someone who has lost their job and now cannot afford their mortgage. I mean, what do you expect? The bank to knock down your mortgage so you can pay it (and all your living expenses) on Mass. unemployment? Good luck.

"Not a living soul wanted to rent to a young family with a newborn and a pre-schooler."

Excuse me? Rona, this must be one of the most patetic excuses for buying a house I've heard in a long long time.

Let us be honest here and say that they decided to take a bad risk and lost their gamble. Oh , wait... they do not look so sympathetic now, do they?

You lie in the bed you've made for yourself. If they took a condo loan that relied on neither of them getting sick or be laid off for 30 years... you tell me how will that story end up other than foreclosure.

Unfortunately, we often get punished for doing the right thing, like saving a substantial downpayment and buying well within your means. The banks only want to help people in foreclosure for two reasons: 1) That's what the government is telling them to do, and 2) they realize they might own your house and they really don't want it......especially in this real estate market.

This is akin to saving for kids' college educations. If you do everything "right", you'll never qualify for financial aid or low interest loans. You'll be entirely on you're own. Your punishment for doing a good job of planning ahead and being conservative.

Summer 2008... I wonder if we'll be hearing more stories like this about spring/summer 2009?

Yes, I challenge any of you guys to find an apartment in the Boston area if you are up front and tell landlords that you have two kids. Most will just refuse to show it to you. After over 100 phone calls and many, many showings that we took the kids along to, we finally found an apartment only by hiding the fact that we have kids until after the lease was signed. It's all about LEAD PAINT, folks - kids under 5 present a huge risk/expense to landlords because they are required to delead which is very expensive for them - but very important because basically any amount of lead paint in a kid's bloodstream lowers their IQ and higher levels cause violent behavior.
Believe me, discrimination against families is severe, esp. in any neighborhood where the landlord thinks they can find students or singles to rent to - i.e. anywhere near downtown.

the thing that gets me most here is the "non-working toilet"... that is against the law and in violation of minimum sanitary housing codes. or was it an illegal sublet? one call to the local health authorities should have helped.

makes me wonder about the validity of the story....

and there are no guarantees in life, including "forever houses", which often depend on "forever jobs" and "forever marriages" and "forever good health".

i am not unsympathetic, but there are too many holes and assumptions....

and melinda and rona, i agree with you about the difficulty of finding a rental if you have children -- even older ones... it is illegal to discriminate though in this way -- the state will intervene. however, you may not want the landlord after that....

out in the more suburban areas (assuming there are rentals), families are preferred because they are considered more stable and responsible tenants. but in the city areas? melinda is right.

Let's just say that people make bad choices sometimes. I had my share of bad choice. I was trapped in a duplex for 4 years with a bad neighbor, and finally I sold the piece of dirt this year for a loss of 90K. I know my family are still blaming me for the loss (hard earned money), but I forgive myself for having made this bad choice, as long as I learn from it. I see many smart people around me make bad investment choices too. My advise is that don't be cheap on paying rent to live. If You have 20% down payment in the bank, use some of it to rent a decent place for your kids to live.

Ironically, taking this risk and speculating you did not give your kids a "forever house". We rent a house right now for 1750/month on the T-line in a nice neighborhood and have young kids, we moved here in 2008 from the apartment, shortly after that my husband lost his job and he remains unemployed. Had we bought instead of renting, we would be in your situation. If I lose my job then we still have savings because we didn't buy and managed to keep saving, and we'll move back to an apartment, we can relocate, we can just pick up and go.
No, our kids do not have a "forever house" heck, my son is not even in the school district we would like him to be. Times are hard and unpredictable, you make wrong decision you pay for it. .
I hope it will work out for you

I've worked my whole life and still don't have my forever home. Have to keep moving for jobs, and that means constantly buying/selling or renting. Renting sucks IMO, but you gotta do what you gotta do to keep a paycheck coming. Note to snotty #12 aka Annoyed (clearly....) not everyone can just go out and snap up another job. I know many, many people who've been "displaced" by their employers simply closing up shop, and there's a legion of people who aren't even getting interviews, much less offers, in any field related to their education or experience. I've relocated in and out of the country and yes, you can find rentals (who could afford a hotel?) You just have to use foresight and be flexible on location.

#24, #26

Could be that the city is worse - when I was a renter in 2001, I looked in Newton, Roxbury and Brookline and nobody blinked an eye at my toddler.

I believe that H & L bought a house because they just wanted to buy a house, ignoring obvious risks and alternatives like moving a bit further out and using the T or commuter rail, etc.

You make your choices, you live with the consequences.

People are so judgemental here. We bought on the South Shore at the end of 2007- I was sure the market was going to go down further, but thought we would live in our house long enough to outlast any downturn- of course, at that point, no banks were failing and I was at a company that had never ever had layoffs- my husband and I had both been there 10+ years. Within a year, we had a baby and everything changed – we realized that our commute was too long and since we both work at least 9 hr days – we needed to cut our commute in order to get our son out of daycare on time and home with dinner and a bath at a decent hour. Nobody understands what life with a baby is about until they live it and I don’t blame myself for not recognizing that the commute would have to go away. We have just sign a P&S for our house with a 30,000 loss (15 reduction in what we bought for, 15 for realtor fees), and are looking for rentals around rt 128 and the rentals are ridiculous – $2300 for un-updated 3 beds? Now, I feel like we should just buy. We still have our 20% down, and our mortgage payments on a decent 300,000 condo with 100 fee would be about 1300. I know the market is still going down and we should wait, but in the meantime, we would pay an extra 1000/mnth over what a mortgage could be if we are lucky ---to rent a decent place. Seems like this would convince people to buy in a declining market. Oh, and it is not easy to find deleaded apartments around 128 when you have a 13 month old. We looked at a ton of places on Craigs list and called several realtors and we have nothing in the end. And we also have 2 cats and these people who have not updated their houses since the 60s still won’t accept cats!

I like it how so many people assume we aren't making it, or that we think buying was an inherently bad decision--it was a decision with real consequences, but we MADE IT WORK! Rona will tell you next week how we MADE IT WORK! The sublet wasn't illegal, (the people above lived there and kept postponing tactics not to fix toilet, and they made our lives a real hell....I think our car would have been vandalized had we proceeded any farther with the Somerville health code enforcement.

And it does stink that nobody would rent to use over that summer, even with our great credit, but so it was. We did need an address by September to send the eldest kid to school with! Excuses ranged from flat out no to never calling back to simply saying we can't rent to you due to lead. We've had great success renting in december with one kid, but not for Sept with 2 kids.

H&L!!!

And don't forget! Mortgage payments were equal (YES EQUAL!) to what we paid in monthly rent at what our eldest calls to this day: "The House of the Broken Toilet" of Somerville.....very Nathaniel Hawthorne-esque for a kindergardener! Of course, condo fees at newly purchased place are 500 dollars every quarter, so that's a loss of 2000 annually right there....But soon you will see how it worked out!

We ARE MAKING IT guys! Wait till next Thursday!

People who are missing consecutive (all) payments should be ejected and foreclosed upon. The modification programs should exclusively help families who are able to stay INDEFINITELY with a modified loan, and who are successfully struggling to make partial payments or every other month payments; give them loans such as a 40 year vs 30 year, or one having an interest-only or negative-amortization interval for up to 24 months to get past the recession.

In particular, the government should simply make an indefinite moratorium on foreclosing (or damaging the credit rating) of people who "self-modify" their loans by making interest-only payments. There should also be a moratorium on foreclosing (but without credit rating protection) for people who make payments equal to at least 85% but less than 100% of interest owed.

People who are missing payments consistently are hopelessly over their heads and need to find a smaller or less expensive place, period.

It sounds like the problem was that they failed to establish an emergency fund equal to at least a minimum 6 months living expenses, before saving for the 20% house down payment.......come on guys, this is personal finance 101

#33 who cares if your mo. pays were equal or less then rent! You have a declining, illiquid, "asset", there is no risk of capital loss with renting...

I am so, so, so, SO glad that I rent.

H/L Loving the wild speculation,
In the end you made the choice to buy in what was clearly a very bad RE market that showed no signs of getting better for some time. There are plenty of locations in and around Boston that have good apartments for much less than what you were paying for your mortgage.

I am in a very similar situation. I am in my mid 30's and based upon the current economic climate and state of the housing market which still shows no signs of a recovering I am going to happily rent and continue to save while prices become rational again.

To H & L:

Try to ignore the negative attitude ( "it's your own fault") that is implied in most of these comments I've read here. When you're going through a rough patch, it's never comforting to hear people say unsympathetic things.

Why does someone feel compelled to say something that is unsympathetic? Why do people tell themselves (and blog to others) that someone out there who is experiencing hard times, somehow deserves the discomfort. Maybe it's because they are experiencing easier times than you, and want to feel as though they were smart, hard-working, and DESERVED their good fortune (when really, it's just that they happen to be LUCKY). It's all about luck. Why did one man have 2 kids with health problems and a wife who died of cancer? Bad luck. He didn't deserve that. Why does tragedy strike some families? Bad luck. No one deserves it.

It serves no purpose to put blame on the person suffering. It's just luck. And if you are one of the lucky ones, when your good luck runs out, you'll know what I'm talking about. So enjoy sitting on your high horse while you can, but your luck just might run out some day.

Why the big secret? You will tell us NEXT WEEK? This is a blog, not a newspaper column.

Its NOT all about luck.

That's just an excuse people who don't like to do the work use.

Its the end of american civilization if it catches on. No such thing as personal responsibility, its just luck.... Oh my god, I think my mind just blew up.

No wonder the lottery (as per Warren Buffett - a tax on people who can't do math) does so well. Because, hey, people who can do math didn't study or anything - they were just lucky.

Amazing.

On the original topic, why not just hire a plumber for a few hundred bucks to fix the toilet, and take it out of the rent? And yes, having replaced many (costs me $150), thats around the range it would cost.

Of course, I'm lucky enough to own a wrench and a screwdriver, and lucky enough to try to fix problems.

If only the original posters had been lucky enough to read this blog in summer of 2008, they would have been lucky enough maybe to think about what they were doing. And lucky enough to think in the biggest recession ever there will be job losses. I was lucky enough to learn that in school.

And lucky enough to have believed the cliches about how you make your own luck.

As I've said elsewhere here, rental agents/landlords are all over the place when it comes to renting to people with kids. For some of them just talking about lead, or other kid-related questions you may have about their place is apparently too difficult; but then, those are people you prob. wouldn't want as your landlord anyway.
I've had some turn us down straightaway, some could not care less, some are cautious, etc...

#39 - I think any non-sympathetic posts (including mine) stem from Rona's question:

"Do you agree that H and L have a right to be frustrated with the structure of the Home Loan Modification programs? Have you been frustrated by them, too?"

Generally, I think there is a frustration with these programs on this board because their purpose:

1. Compensates folks who probably should have known better than to believe the hype about endless real estate price increases (against the advice and instincts of many of the knowledgeable folks on this board)

2. Maintain a certain level of price inflation rather than letting the market self-correct at an unencumbered pace and manner - keeping prices artificially high for the FTHB who heeded their advice, and yet now finds their foresight confounded by a historically unique type of government intervention and price manipulation.

So, it's likely less about a lack of sympathy, but more of a reaction to Rona's characterization.

If these folks have found an ingenious way to keep their heads above water without the government programs, then I tip my hat to them.

#39, "It's just luck." No. It's not. I'd like you to show me one article from a reputable publication that attributes our current economic slump and this real estate correction to bad luck. The forces and triggers were in place long before September 2008.

I sympathize with these people--I really do. I feel HORRIBLY for anyone that loses a job--ESPECIALLY someone with children, and especially a family living in a high cost-of-living area! I don't think anyone here is HAPPY that these people experienced a major set-back and potential financial tragedy. That would be cruel--inhuman, even. What people seem to be pointing out is that, to them, there seemed to be enough data points that should have led to a different real estate decision.

This is, has been, and will contiue to be a buyers market. If you can get a mortgage, this is the perfect time to buy. Why are people criticizing them for buying? Clearly they could afford it, now the question is how.....

The problem isn't lead paint in the house, it's lead EVERYWHERE, such as in the dirt, oozing out of plastic window blinds, Chinese-made toys. There's a presumption that if a kid is exposed to lead it's because they're eating paint, and that's just stupid.

The state could just as easily indemnify landlords instead of stab them with this stupid de-lead law--all it would do is make it easier for parents to find apartments. Would have no negative impact on kids. Blame the legislature--they caused the problem, and could fix the problem if they wanted to.

This is NOT a buyers market. I can't believe people still say that. Funny thing is, they've been saying it since 2005

"We've had great success renting in december with one kid, but not for Sept with 2 kids."

I have to sympathize with H/L on this ... unless you have lived in Boston or know people in Boston, you don't realize that you will be paying top dollar for renting in Aug/Sept. and competing with so many other people coming to the area for grad school. But if you are from the area, then you should have known to rent before the Aug/Sept crunch.

A better solution than buying would have been to rent outside of Rt128 (or even inside 128) at one of the new apartment complexes that have sprouted up in the last 10 years.

They found a student that needed housing and rented a room in their condo,or they found another family in the same boat and now they're all living together.

It's hard not to be judgmental on this one. There are so many sob stories out there that frankly people are tired of listening and have run out of sympathy. To H/L Some of the problems to your story do not pass the smell test :
1. Didn't you check the bathroom before you signed the lease?
2. Exactly how much were you spending in rent at this miserable place vs the condo? Most rents in Boston for a 2 bedroom are $1200 - $1500.
3. Commend you on your saving for a downpayment - but I don't think from the sounds of this letter - it was much of a stretch.
4. Wonder if you owned a decent car because why were you so set on living in Boston?

I am currently employed, and a single income household. (By Choice)

I had a prime loan of $361,000 30yr fixed @ 6.50%. I tried a traditional conforming loan refi in January to no avail. BoA claimed my LTV was too high due to declining market in my neighborhood.

When BoA announced they were participating in the Making Home Affordable plan I jumped at the opportunity to lower my interest rate to 4.87% with no points and limited closing costs.

Initially getting any traction with the bank was like sitting for a root canal. BoA was not up to speed on the rules or the MHA program. It took me 3 weeks just to get my name onto a list. Only to never get a call back. 3 weeks later I started to call them EVERY DAY. After than 2 months to get a loan officer assigned, and yet 2 more months to finally close.

While I count myself very lucky, I also worked my rear end off making sure this refi did not derail. It takes PERSISTENCE, and literally calling the bank/lender every single day. Sometimes even twice a day. Do not listen to them when they say, "call us back in 2 weeks", or "X will happen by Y time." People who are successful in making this refi occur are the ones that are literally a giant pain in the a.s.s to the lender. You MUST be persistent and be aggressive. Otherwise it simply will not happen.

I am happy that my refi is done, and I lowered my monthly mortgage payment by $689 a month! It can be done. Just stick to your guns and keep pushing the rock up the hill.

Sadly many people just do not have the patience, the time, or even the ability to properly communicate to their lender. I feel this program would be far more successful if people were more responsible for their own situation. It all comes down to PERSONAL ACCOUNTABILITY. Yet time and again, all I hear are people blaming the banks or the government for their woes. If people were more responsible for their own actions, or actually TOOK action to begin with instead of acting like Dorito eating b@stard factories sitting on the couch watching TV and waiting for the government to solve their problems we would all be in a far better place today.

Point #1. I just did a quick search on Craigslist and in 30 seconds I found 8 of 10 apartments with three bedrooms in Boston that were $2000/month or less. Why couldn't you find an apartment for months? Did you limit your search to single family homes with yards or something? There are tons of apartments available that are easy to find with no effort at all. Of course you want to buy a home but you don't need a home. In 10 years, your kid won't remember if you owned your home when he was 6.
Point #2. H wants to go back to school to get a lower paying, less demanding job. That's fine but with the house payments and family, now may not be the right time. He may have to get a job that pays the bills for now and go back to school to get the ideal job later. Right now it sounds like he wants what he wants and he wants a handout to get it. Why? Work now, go to school in 5 years when your kids are in school.

To answer some more questions:

1. Admittedly part of our difficulty finding an adequate rental was because we had very specific geographic preferences. We were only willing to look in two or three towns (not to suburban and not too downtowny, and where we have existing social networks), all of which are particularly high demand for September rentals. And all of which also are almost entirely old construction, a.k.a. lead paint infested!). I don't know where average 2 bedroom rental rates are 1200 - 1500 in the Boston area, especially in September, but certainly not in these three towns!

2. In our defense and regarding the summer sublet, we were moving from abroad and agreed to the sublet sight unseen. So no, we couldn't do things like test the toilet. We had hoped the sublet would turn into a year-long rental, but it didn't work out, which left us scrambling for a new living situation in August. Unfortunately, we didn't have months to find a rental.

3. In retrospect, of course, we still may have been better off renting, but the mortgage we took out was extremely conservative given our income at the time, and we did not break the bank with the downpayment. Also, in my industry it was very unlikely even then that I would lose my job. It would take a complete financial meltdown. And wallah, that's what happened!

4. To #51, I did call everyday, sometimes twice a day! But the particulars of our loan/downpayment/financial situation, it doesn't make any sense for the lender to modify our loan under Homes Affordable. They don't care how much I bother them.

5. It's true that I could get some sort of paying job instead of going to school. But it wouldn't be in my field, which would be a complete waste of my degree and would severely limit my options going forward. Going to school is a sacrifice in the short term, but is most beneficial to us financially and otherwise in the long term. I also don't think it's too much to ask for assistance from a program that was purportedly designed to help people who have become unemployed and are facing a difficult financial situation. This would be true whether or not I decided to go back to school.

Wow, things are fine with us guys! We actually don't regret buying! We love our house, and seriously what we spent was WELL beneath our means. And we are hard-workers, and did all we could with Chase, called every day. etc.

We don't view ourselves as being in serious hardship. It would have been nice to check the toilet before agreeing to a rental when setting up housing from Germany, but it was ok, though very tense at the time in an owner occupied rental.

I think the amount of speculation is fine, but just reminds me how much people have such different attitudes about what is possible fiscally and how fixed peoples lifestyle views and financial views are. We are young, but very fiscally conservative, more so than I think most people twice our age, probably because I had my first baby during college and paid my way though both mom-hood and job-hood and schooling. We don't think our condo will seriously depreciate in value, mainly due to my own capital improvements over the past 8 months (and the desireability of the area we live in). I am glad to have the freedom to install doors, retile walls, repaint, repair old porch rails, do landscaping work, etc.). We don't regret the decision to buy at all. Maybe we'd have our down payment back, sure, but even without that down payment, we are DOING FINE!

Maybe we do have an emergency fund--yes, ok, we do. We still have stellar credit. The level of negative assumption here is weird. But really, we're doing JUST fine financially. How many 27 year olds can save enough for a down payment after only 2 years in the working world with no savings before hand? I am proud of what we were able to achieve. And I gotta say one of the guessers above is close to right...

I guess It is misleading to say that "we almost lost our home" but I'm very young, resourceful, resilient and of a problem-solving bent. We are always open to alternative arrangements, which you will find out about tomorrow.

And that's all you'll hear fro H & L until tomorow....we are busy taking care of our "situation" until the 24th!

Take care, and go in fiscal peace and goodwill!

We are real people here! And it's fine not to believe our story.

H/L...so you are not going to lose your condo (which is great!)...with nobody working and no loan from mom and dad? Please explain. It seems that everybody is in on a secret that I am not aware of in real estate...do I smell an inheritance? I am thankfully employed full time (with a masters degree), have a partner that works full time, only one school aged child, and we just bought our first condo (at an "affordable" price) in a nice suburb that some would consider the boonies(it's about 40 minutes from the city by car), at a competitive interest rate...and we're just making it. Please explain how on earth one keeps a condo in an exclusive Boston neighborhood with no income, and then deserves loan modification. If this sounds snide, it isn't meant to be, I am sorry for the job loss and applaud your ability to save money. Just not sure how this seems to work for everyone else.

@Charles: Um, so what is it, a seller's market? I think all the foreclosures and short sales will definitively answer that question for you. The term "buyer's market" implies that the buyer has more bargaining power when establishing price on an asset, whether due to increased supply or decreased demand. So, yes, this is clearly a buyer's market, albeit a potentially risky one based on environmental factors (e.g. stable income, volatily in lending, etc).

excellent point baffledby, how does one earn a load modification with no job or income? Being somewhat knowledgeable of the financial markets, I was under the distinct impression, one would have to provide documentation of income/employment in order to obtain a loan mod. Otherwise, why would a bank even bother, they would better of taking back the property today, rather than later in a declining market.

Is the monthly mortgage payment much higher than renting an equivalent place?
If not, then they are not irresponsible at all.

In fact, as someone suggested, perhaps they rented out their house and moved someplace cheaper. That way, they are managing to earn money on their house.

#56 - false dichotomy. The world is not black and white. Its neither a sellers market nor a buyers market, but rather a market in transition. Which is normal.

It is moving towards a buyers market, but that won't happen until sellers capitulate.

Anyone who buys now, and sells into the true buyers market that is coming (and which will also end at some point - that's how markets work) will be hurting.