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Monday, September 26, 2016

Silver Lake foreclosure drama goes from blog to book

Photo by Nick Bastian/Flickr

It’s been more than two years now since Stephanie Alison Walker and her husband, Bob,  sold their Silver Lake home in a short-sale  that she chronicled in a blog called Love in the Time of Foreclosure.  The blog, a diary of the couple’s financial and personal struggles, has now been turned into a digital book  that  went on sale last week. Walker, who now lives in Chicago with her husband, baby and dog, explains in a blog post (of course) why anyone would want to spend $9.99 on a digital book when most of the material is already online for free:

The book will be comprised of the blog posts that best tell our foreclosure story as well as NEW posts that I never published. There were things I wrote about but was afraid to make public at the time, mostly because I didn’t want to scare off any potential buyers. Those posts will be in the book. The book fills in the gaps in our story.

Click on the link below for an excerpt.
Friday, January 16, 2009

Today is the day the bank officially begins foreclosure proceedings on our home. How do I know this? Because this was the deadline they gave us in a very unwelcome letter that we received the week before Christmas. I’m talking about the Letter of Intent to Accelerate. Accelerate what? Well, our foreclosure. That’s what. This un-Christmassy letter stated that we had until January 16, 2009 to bring our loan current and avoid foreclosure proceedings. That’s today.

Because we did not “bring our loan current,” i.e. pay $16,000, they will begin foreclosure proceedings. Today.

Bob and Stephanie Walker with son Malcolm and Pablo the pug. Photo courtesy Outpost19

Back in December, a few days after we received the dreaded Letter of Intent to Accelerate, my mom and stepdad Tom flew in for the holidays. Through her real estate connections, Mom (who’s been a Realtor in Illinois for over 25 years) arranged for us to talk to a short sale guru. This man’s entire mission is to help homeowners avoid foreclosure. We were so happy to finally be able to talk to someone who is a mentor for people in our situation.

And so a few days before Christmas, Bob, Mom and I sit around the kitchen island, put the phone on speaker and dial the guru.

We fill him in on the details. We tell him how long the house has been on the market. Four months now. How many buyers have been through. Hundreds.

He recommends we drop the price immediately and go for the short sale. Then if it doesn’t move, drop the price again in two weeks. Keep dropping it every two weeks until it sells. Talk to a HUD counselor, write a Letter of Hardship, call both lenders, track everything – every call, every interaction. Be gracious. With everyone.

“Look, I know how you feel,” he tells us. “My wife and I went through this too. It’s terrible. It is. But it could be a great thing for you. You’re young and your attitude is really good. You’re gonna get past this stronger than ever. You will.”

As he’s talking, I notice that I’m crying. I look up to find that both Bob and my mom are crying too. We’re all crying. Mom’s nodding her head. We’re rapt. He’s connecting with our emotional core.

“And listen,” he continues. “My mission is to help people avoid foreclosure at all costs. But, if it comes to that, foreclosure isn’t the end of the world. Okay? You’ll get through this.”

We thank him for his candor and compassion. We hang up. Look at each other. And just say, “Wow.”

We wipe our tears. Exhale.

Then continue the calls.

Countrywide

National City

Department of Housing and Urban Development



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No comments

  1. I think I just threw up a little. How did they end up owing $16,000 to make their home loan current? They seem like intelligent people. They went to great lengths to blog about their experience. They’re literate. They spared no expense in furnishing their home. Surely, they were able to understand the terms of their loan. Am I to understand that they well understood that at a certain point in time they would no longer be able to afford their house? But that they assumed that before that time came, they would be able to sell the house for a tidy profit? And when that expectation didn’t pan out, they were forced to short sell and ultimately foreclose? Please tell me that this was their rational if unreasonable expectation. If loss of income was the culprit, then where was their emergency fund–which one would expect any prudent buyer to include in the analysis of a home’s affordability. In any case, I’m not going to read their blog or book to find out. The above excerpt was enough to make me suffer a painful gastroesophageal reflux. I have been looking for a house to buy for over a year. No luck. The house I want, I cannot yet afford. Either I have to reduce my expecations, or I have to keep saving and be patient. Or move elsewhere. Because a life lived responsibly does work that way.

  2. No one wants to read books by losers.

  3. Some hipster hater told them if they didn’t like it here to move, and they did. Wait that might have been me that said that. I was just kidding, you didn’t have to move.

  4. @Martin

    I’m in the same boat as you (looking for a house to buy, can’t quite afford what we really want, so we’re reducing my expectations and looking for a house we like and can afford, all the while continuing to save). That said, keep in mind that the world of real estate was a completely different place before 2008. There really was an expectation that was common throughout the industry (and society at large) that house prices would continue to increase, and only the rate of that increase would fluctuate. Beyond that, many home buyers were simply lied to, especially at Countrywide, which is the source of many pending lawsuits and investigations by the Attorneys General of nearly every state in the country.

    So I wouldn’t be so quick to judge them. To be sure, we wouldn’t have a foreclosure crisis this severe if the only people who got foreclosed on were people who weren’t smart enough to know what they were agreeing to or people who didn’t plan intelligently.

    Beyond that, our definition of what “planning intelligently” means in 2011 is very likely different from the standard behavior whenever the Walkers bought their house. Our entire society and economy are based on taking calculated risks, and almost nobody saves as much as they would need to in order to avoid financial hardships regardless of their circumstance. That’s true even now, but it was more true before the 2008 credit crisis.

    You don’t blame a pedestrian for getting hit by a car because they weren’t smart enough to not cross the street. You might assume that they weren’t in a crosswalk, or that they were crossing on a red light or something, but even if they were in a crosswalk with the right of way, that wouldn’t preclude them from getting hit.

  5. Geez these comments a little harsh! Allmost sickening actually, because so many people are going through this around the country, and here these commenters are judging these people as if they are so much mightier than them. We dont know what could have happened to them so it’s not fair to judge, but to assume they are just losers or they didn’t have a back up ….. Lots of people can easily fall into this predicament, what if you became disabled and had loads of medical bills, regardless of how much you saved this could easily be you and you can lose everything within the blink of an eye. People should never think they’re any better, have a smarter scheme or idea about “making it” to the upper middle class- if these rallies going on in LA and NYC teach you anything is that you’re still at the bottom of the barrel and will never be that top 1% that will never have to worry about this issue!! I will send my bad karma out to you folk and hope you lose your legs now 🙂

  6. I have little sympathy for the author of this blog-turned-book, and little interest in reading any more about her travails (I did peruse the blog a few times). There are so many more pressing, serious issues in the world that deserve our attention; her foreclosure was entirely self-caused, and to me it seems a bit whiny and self-centered (and lacking perspective) to write a whole book about such an issue.

    Furthermore, if someone can’t afford a house in Silver Lake, there are plenty of other areas around town that are more affordable and just as (or nearly as) safe, though less trendy: University Hills near Cal State L.A. (90032), Montecito Heights (90031), parts of Glendale and Burbank, and if you don’t mind a bit of a drive, La Crescenta (91214) or parts of Tujunga. The 90029 zip code has deals, too, though the neighborhoods are more crowded and gang-plagued. There are incredible deals out there now, but not in Silver Lake or Echo Park; there’s just too much demand for homes in those areas — unless you are able to make an all-cash offer.

  7. @ BrianM

    During the period of real estate before 2008 I was slackjawed at the choices people were making. It’s not as if a noxious cloud of unwilling disbelief in financial responsibility descended upon the country. We were in a real estate bubble, and that was well understood by many people. Did mortgage brokers, lenders and real estate agents behave in a sickeningly unresponsible way? Sure. Were a set of unrealistic expectations in place that altered people’s financial behavior for the worse? Yes. However, I reserve my sorrow for those people who did not have the intellectual resources to understand what was happening to them. They were preyed upon by the aforementioned. Our bloggers are not those people. I am not going to extend sympathy to entitled and educated young couples who bought hilltop homes in Silverlake and then went shopping at DWR in the unfounded belief that their betterment would always increase and that only the rate of its increase would fluctuate.

    Finally, if you blog in detail about your travails in real estate and later try to sell it as a book, it’s not unreasonable to expect some criticism and judgment.

  8. I’ll join @Ash in the sympathetic camp. If these were not such strained economic times where all are at higher risk I might be more judgmental. Also agree with @Ash that the prevailing wisdom pre 2008 (and up to that point it was empirical wisdom) was that it was wise to get in if possible as if you waited you might be priced out. In hindsight is looks like foolish advice but at the time it seemed the right thing to do/advise. I don’t get any shadenfreude from these people’s plight.

  9. Bob and Stephanie were my next door neighbors while they were living in their Silverlake home and they were easily among the kindest, most gracious people on our block. They were greatly missed when they moved, but I’m lightened to see that they are settled in Chicago with Pablo in tow and a new baby as well. I’m a renter, and haven’t seriously considered owning enough to understand all of the legal and financial details of their experience. I began reading Stephanie’s blog when she started it, and although it contains information about their foreclosure process, what I remember being struck by most was the complete openness in which she (they) shared about the day-to-day effects it had on their relationship. Yes this is a story based on a foreclosure, but it’s true inspiration comes from this couple’s love for each other and how it was made stronger, not weaker, through a very trying time. I moved to Mt Washington just over a year ago and have thought about Stephanie, Bob and Pablo often. Regardless of any criticism their story might inspire I was made happy by seeing this post about them today. They were my neighbors, they are good people and they will be fine.

  10. Nobody is asking you guys to feel sorry for this couple. But understanding how people are ending up in foreclosure and how hard it is to undo the mistakes made by lenders AND borrowers is essential in trying to fix the economic crisis. Being a jerk commenter on a message board is probably a lot easier than trying to understand where the problem comes from and how to fix it, but it doesn’t help get our country out of this crisis.

  11. I do truly feel sorry for people who have found themselves in this situation. But, if you were at all paying attention, this wasn’t so hard to foresee. I bought in 2005 at what I knew what likely to be the top of the market (it was the right thing for me); after 3-4 years of 20% increases, it was clear things were going to drop — substantially. Okay, I’m in my 40s, but I can remember the 70s and interests rates in the double-digits. How the heck anyone would take out a variable rate loan when rates were at then-record lows? But I had depression-era parents who never bought a new car and who saved almost 20% of their income — and I realize that is a dying breed.

  12. Hey B, would you like to know how to stay out of financial trouble? I’ll tell you how I’ve managed to do it: I bought a house I could afford (actually, a fixer-upper duplex) and fixed what I could myself (with my father’s help), I lived in the crappier unit for ten years while I rented out the nicer unit, I saved my money by driving used Toyotas to nearly 200,000 miles, I bought my shoes at Goodwill and my furniture on Craigslist, I paid extra money toward principal, I tuned out all the come-ons from mortgage brokers to borrow more $$ against my house — or, as one newscaster termed it, “unlocking (my) equity” — and when I finally refinanced in 2003, I didn’t pull any cash out; I refinanced to a 15-year fixed rate, then paid it off in seven years. I did all this on a salary that ranged from $37,000 in 1997 to $60,000 a year now, and I still managed to travel, dine out, and enjoy life. I sacrificed over those years, but when I look at how people live in other countries, I can hardly call my decisions sacrifices.

    I feel for people who were scammed or deceived by unscrupulous lenders or real-estate agents – but please don’t ask me to feel sorry for folks who tapped their equity to buy an SUV or finance a film project or remodel their kitchen.

  13. I’m saddened by the harsh comments about this family. If you had read anything about them, they made plenty of money to afford their home and lifestyle and then had a drastic pay cut. They were literally living on maybe 25% of their normal income. From personal experience, even with savings, when you’re in that kind of situation you can’t get out fast enough to stay afloat (and they were in a much more difficult housing market than I was !) They also did everything they could, including selling everything they owned to pay what they could. Not to mention they made it through this terrible trial with their marriage intact, which is just unheard of these days. She is a really great writer and it’s definitely worth the read. I personally applaud them. In an America where people can sit around and expect things to be handed to them at the government’s (and taxpayer) expense, I say way to go to a couple that tried to do the right thing in a bad situation.

  14. @James,
    you righteous cun! Did you crush a lot of ass in your 200k Celica and fungus-ridden plastic goodwill kicks?

  15. Wow, what do you know, I was right, it is easier to be a self-aggrandizing jerk commenter than to take the time to understand the complexities that went into the financial collapse and the housing crisis!!

  16. their story sounds sad, but what is up with that cover?

    were they too broke to pay for a hyphen between “fore” and “closure”? it’s one word, not two.

  17. It’s really simple.

    If you can afford to buy a property of a certain value, and are prepared to take the risks of home ownership, which of course includes possible devaluation, then those are YOUR risks and NO one else’s.

    Part of ‘smart’ home buying is not only being conservative in your income valuation, but also putting aside a ‘oh shit!’ fund. Whether it be cash, something of value (vintage car), etc. This ‘fund’ is there to save your investment, the house, in case of ‘oh shit’ moments like loss of job or pay reductions, etc.

    Now, if you were smart enough to do that, AND you run through your ‘oh shit’ fund, and there seems to be no solution in sight (enough income), then the time has come to make a decision. Do you ‘double down’ and hold out for the possibility of income that may or may not be there in the future? Hold out for the possibility that your house might recover it’s loss in value? Well, if you hold out (gamble) and it doesn’t work, then that is the risk YOU take. Next stop might be foreclosure or short sale, etc. Those are the risks you take.

    Or, you take the safer route out and price to sell NOW, and get out…with a loss. Deal with it. It’s part of the risks of home ownership!! You’ve learn’t a lesson, even if it was a pricy one (the best lessons are expensive!).

    Now, if you bought/buy a property that you can barely (or not) afford, with no ‘oh shit’ fund (or even ‘with’), then guess what? You bought an investment, not a home. Sure you can ‘live’ in it like a home, but it certainly doesn’t have the stable aspects of what a home is. IF that investment goes south, then guess what? It was a risk that YOU took that didn’t pan out. The reasons SO many here in this country took this risk is that they saw $$$ signs about potential profits during the bubble. And make no mistake, anyone that assumed the double digit appreciations of properties during this time was ‘normal’ and sustainable where people who either didn’t do much research or were looking more at the ‘investment’ qualities of the the purchase than the ‘home’ part (i.e., ‘easy money’). And yes, the free-for-all easy credit compounded the problem greatly by increasing the size and length of the bubble as there were no shortage of suckers (buyers) to keep the bubble growing.

    For most, a home purchase would be the largest purchase they’ve ever made and some prudent research and caution would be the smart action.

    And for anyone in trouble with their property there’s a simple way to look at it: You took a risk and you can either double down or take the cautionary way out, either way, this is part of home ownership. If you don’t want to play that game, then RENT!

    None of us (including the bank) made you buy your troubled property. Only YOU did and as an adult making adult decisions, the risks involved were 100% yours.

    And for those buying properties today, the same cautionary tale applies. Just ‘cos property values have dropped, don’t assume you’re getting a deal of the century. You’re only getting a deal RELATIVE to the peak bubble prices. Don’t assume prices still won’t drop over the years and values are still way overpriced relative to the LA city median income level. And that’s for those who still have a job!

  18. B — It was a Camry. 🙂

  19. Oops — the last message was in response to Buttplugger, not B (not that there’s much difference between the two).

  20. Not to beat a dead caballo, but I wonder if the foreclosed-upon couple tried to rent out a room or two of their home. Silver Lake is pretty sought-after, and they could probably have rented out a room for $700 (or more with a private bathroom). If it were me, I’d have slept in the living room or garage and rented out both bedrooms until my financial situation stabilized. Then again, most Americans aren’t willing to sacrifice their personal comfort to that level, even when the bank is scratching at the door.

  21. James – Camry = Baller

  22. The amount of compassion shared here by the commentators is absolutely underwhelming.

  23. @clvngodess,

    ‘Compassion’? Maybe you can enlighten us on why we should show compassion for a couple that bought a $800k house they literally couldn’t afford? I mean, they put it up for sale only 2 years after they bought it.

    Would you show compassion for me if I bought a brand new $50k Hummer that ended up getting repossessed ‘cos I could’nt afford the payments and gas costs? When I could have just as easily bought a much cheaper, smaller, better gas mileage car that would still get me to work and the store? Or even a cheaper used car?

    Is buying a $800k house (or ANY house/condo) somehow a human right? That should be protected by others who didn’t buy, but rent instead?

    I’m serious, please enlighten us, I don’t want to have the slimy feeling that I might be uncompassionate…

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