Another Real Life Foreclosure Story
I was almost FI, and then I was FI (in my opinion), and now I'm not. Ever since being included as a case study in the new version of Your Money Or Your Life, and publishing my own book, Dream. Invest. Live., I've been very public about my personal finances. If we're going to remove the taboo we have about discussing money, we have to be willing to talk about such things in public. That's one reason I blog.
I rarely include my blog posts here because they are too long, but this one has some relevant info for people in Washington State that I thought was worth distributing via a link. There's a lot of other stuff in there; but, in particular there are two processes I finally had described to me: the money analysis waterfall, and the foreclosure timeline. I hope to avoid both by making enough money (I'm already frugal enough), but it is a relief to finally have them described to me.
Each state is probably different, and every story is too. I'm interested to see if others have similar info for the other states.
Here's the long version of this episode in my housing story.
One thing is definitely apparent, this process is so bizarre. This can be more confusing than taxes, and with a lot more stress involved (at least for me.)
Please add your story to this thread.
I will get to reading your blog soon but just wanted to thank you for being so open about what you went through. Thank you for sharing. Chris
Hey Tom, I don't really have anything to share on the subject, but I wish you the best and hope you get to keep your home!
Thanks for the very interesting links to your blog, Tetrim. I guess I do not quite follow the story of your foreclosure--was it a result of job loss? You talk about reaching FI and then losing it. Is this because you took early retirement? Or did you plan on a certain return from your portfolio and not get that return?
I ask because at 57, I would LOVE to retire, but I don't see how it would be possible with health care costs. I wish I could retire, but I would be afraid to. Even without a mortgage, it is hard to pay the bills, with food and gas tripling in the last ten years.
We have gotten to the point where although we want to move closer to our children, we do not feel (well, I do not feel) that I can ever take on a mortgage again. Reading your blog just intensifies that feeling. We bought this house as a foreclosure, with cash. It was completely trashed--so bad that there was animal feces on the walls when we moved in--yuck, good times, as they say on SNL.
So I guess we are going to be dealing with tiny little houses in rotten shape if we are going to buy again. I just feel that these days, when one takes on a mortgage, one is making a deal with the devil.
What were the circumstances that resulted in your foreclosure? If you feel like sharing them. I have not read the updated version of YMOYL--just the original, 15 years ago, and it impacted many of my decisions. Is the investment advice different in the updated version?
"I guess I do not quite follow the story of your foreclosure"
The story from FI to definitely not FI is just an example of how unpredictable the world can be. In open admission, I put myself at risk buy investing in particular stocks, and while it is easy to point at one cause, really I've gotten into this situation through an epic string of bad luck (which of course could all be avoided in hindsight.) A divorce is involved (half of enough for two is not necessarily enough for one). My optimism for my portfolio based on the previous thirty years of similar investing (data is available in my book, Dream. Invest. Live.) Then, I had to move out of an unhealthy, yet frugal rental that I wasn't allowed to fix up; so, I bought a small house. Unfortunately, that was near the peak of the market. The real estate bubble popped. My portfolio was hit by a triple whammy of unconnected yet simultaneous events, and for once my diversification was struck down across every stock. I had over a half dozen stocks and each fell by at least 80% and a few fell but over 95%. My optimism remained though because the companies were doing better and eventually the stocks will reflect that, right?
About 21 months ago I decided to be more active about my finances, cranked up my side business (consulting, writing, and art), and started applying for jobs. When that wasn't successful, 12 months ago, I put the house on the market.
Like I said, the full story is more complex, and is even drawing an international crowd over on the blog. I've even been asked to put it together as a movie. (I'm working on it. I'm working on it.)
I am an optimist. As much as things can look dismal, I think part of that is because we are coming out of a Dismal Decade. As much as luck didn't work for me for a while, I think that can turn around and luck can work well, and very well. Hard work and an open mind creates a fertile field for good fortune. Okay, sooner is better than later.
I understand the concern over health care costs. The only solution I see it mitigation, try to live healthy. As for debt and housing, I think the industry is unwittingly creating a large population of people who are repulsed by large homes, mortgages, and even credit card debt. I hope to keep my house, and if I lose it, I hope to own a house again. If I have to buy or build on my own (I'm single), then I suspect I'll do so for cash.
So much for a quick answer, and I don't know if I answered your question, but thanks for the inspiration to pull some of the thoughts together in a new form.
Hmm well intersting. I lost my house 2 1/2 years ago. The value dropped $100K and I did not get a job in my field after years of study (partially because of the horrible economy) so I could not ride out the drop. So I was thinking I was going to recover soon, I still cannot open a new checking account my credit is so bad, and now the 2nd mortgage came back and I am in a chapter 13 bankruptcy to protect myself from an unreasonable collection and my ex husband. Just starting to accept that, and my health insurance is being raised $70 a month. my mom cheerfully asked what additional benefits I will get with that. Well none, of course. You knw $70 a month is a really big increase but I cannot just let coverage got for my children after all. My district is not allowed to give raises in our positions either. I am scared that if I need to move to lower my rent I won't even be able to do that with my credit, I will admit to late payments on things, and bounced checks from my ex, and a couple thousand in dental bills.
Thanks for filling in the details of the foreclosure, Tom--it sure sounds like a perfect storm, as does Zoe Girl's story--you get hit with a bunch of things all at once.
Divorce is a killer, that is for sure. I went through one,a nd times were very up and down, you know--from pawning my wedding ring to pay for groceries for the kids, to ending up safe and free out of abusive relationship to owning a house again. I made decisions based on the original YMOYL and many of those decisions turned out to be countercultural for the times but very helpful in the long run. I gave up my large and beautiful dream house that the judge gave me in the settlement and gave it to my abusive ex, because I feared he would kill me if I continued to live there (and it was secluded and he probably would have gotten away with it). Financially, was probably not smart--it is now worth 3 times what we paid for it--but at least I did not go under with maintainance and taxes. I dramatically downsized. That turned out to be smart, in the long run, given the economy. I took over managing what money I did get in the divorce myself, after financial mishandling by 3 brokerage houses--I am comfortable investing my own money, although many would consider me overly cautious.
Several years of big medical bills after a life-threatening illness that left me temporarlity paralyzed--this was our challenge to dig out of, but did it. So mitigation is not the answer for me because I live with chronic illness and cannot afford another episode like the last--the funny thing though ws I was getting my health insurance through my part-time retail job, and worked there for 5 years, and I think they ended up paying $100,000 of medical bills on me, so it worked out that I got paid an additional $20,000 per year!
I really empathize with all of us. I think for my generation, times hve gotten hard and will just get harder. Don't think we are returning to the easy money days of my 20's- 40's, and I kind of missed the boat there.
I agree with you about little houses, and I hope you can get the foreclosure reversed, or get a successful documentary out of it and can buy it back! I have a recurring dream about the house I lost in the divorce, that I get it back, so I know how heart-wrenching it is to lose your home. Hope you can turn that around, although sometimes things turn out fine after foreclosure--my 90 year old father-in-law, Distinguished Service Cross and Purple Heart war hero, just was foreclosed on last year. But they now rent from her cousin, and have a larger, nicer house closer to the beach, so God tempers the wind to the shorn lamb, I guess.
It still seems shameful what is going on with the foreclosures. I will not take out another mortgage, based on what I see around me.
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