When Foreclosure Hits Close to Home

A BUZZFLASH NEWS ALERT

When BuzzFlash first started in May of 2000, there were very few progressives tearing up the Internet. Among the relatively small group were Michael "Symbolman" Stinson and his wife Julie Sigwart, who founded TakeBacktheMedia.com. They also invested tens of thousands of dollars in taking on the Bush Administration through video projects and the Internet, even though they are of limited means.

Eventually, they decided to move to Hawaii and raise their young son, Conrad, there. They bought a modest home, but personal circumstances and limited work opportunities have just led to their house being auctioned away this past weekend.

BuzzFlash has used the skilled IT services of Julie off and on over the years and we feel that she and Michael are members of our extended BuzzFlash family, as they are on Democratic Underground. Their story is just one of the all too many foreclosures that appear abstract, until it happens to someone you know.

When Michael posted an item on Democratic Underground explaining their situation and general absence from the site, the outpouring of support and grief was almost overwhelming. In addition, many said they already had, are in the process of, or are fearing foreclosure proceedings themselves. Author Mark Crispin Miller also blogged about their plight over the weekend. Though they're unable to do much work on their site, they are able to accept donations via Paypal here.

Their three-year-old son Conrad, could be heard meowing playfully in the background as Julie told the story of how this whole thing happened.

Michael and Julie had a regular loan, but were having trouble keeping up with payments. They decided to rent out a part of their home. Then, they put the house on the market in October 2007.

People were definitely interested in buying the house, which meant the income from renters came to an end. The house was in escrow four times, but each time the potential buyers were unable to secure loans because of the credit freeze in the banking industry. The bailout of American financial institutions was meant to free up credit, but still banks are not lending.

Next, they tried to give the house away. The New York Times publicized their raffle back in September. But the response was minimal, so they had to refund the raffle tickets and give up that idea.

Julie tried filing for Chapter 13 bankruptcy, but because she didn't have the hundreds of dollars in filing fees, the case was dismissed.

Then, things began to turn around for them financially. With the prospect of more work, the couple renegotiated with their mortgage holder. The plan was this: They would pay their regular mortgage amount for the next three months -- starting at the end of December -- then on the fourth month, the mortgage company would renegotiate the terms.

"They tell you something over the phone and you believe them," Julie said. The mortgage agency didn't send them anything in writing, but considering what the company did next, that omission is not very surprising.

Before they even got the chance to make the first payment under the new plan, Julie learned that the house was going to be sold. They got no warning; Julie had called the mortgage holder this past Friday to check on paperwork the company had promised to send, coincidentally just hours before their house was going to be sold at auction.

"This isn't supposed to be happening," Julie told the mortgage company representative. "Stop the sale."

She thought she still had a chance when the representative asked her how much she could pay that day. But when she told him she only had $700 on hand, the man just laughed. He said they'd need to put up $3,000 to stop the sale.

Julie agreed to the conditions, figuring they'd find the money somewhere. But then the representative changed the rules on them again. After talking with his supervisor, he said they'd need $34,000 to stop the sale.

Now they realized the man was not really trying to be helpful.

"That was the worst part," said Julie. "They're just sitting here stringing me along."

Of course, neither Michael nor Julie could talk to this supervisor. Citing the fact that they had never been notified of the sale date, they asked to talk to someone higher up at the mortgage holding company.

"He refused," Julie said. "[He told us,] 'This is not a supervisor matter,' as he's auctioning off my house."

Julie knows some of what the company has done to them is illegal, but she hadn't been able to get a hold of any authorities or legal representation yet. She's heard about other "weird things" that the mortgage company has done to different customers, such as, instead of communicating with homeowners that are having a hard time paying their bills, just changing the locks on the house in question.

Michael calls it a "land rush -- under the cloak of foreclosure."

Michael and Julie can't help but look at the larger picture represented by their unfortunate situation. From their point of view, it was in the mortgage holder's best interests to keep them on the path to homelessness. That way, the mortgage holder gets the money paid so far toward the house, as well as the house itself. Though BuzzFlash is as yet unable to reveal the identity of the mortgage holder, we can say that the company has requested a slice of the $700 billion bailout pie.

"Is this all just one big scam? Are they just putting it in their pockets and getting the properties?" Julie asked of the bank bailout. "These people have potentially run the system into the ground."

But in the long term, this isn't good for the broader economy; the vicious cycle just continues. Banks don't make loans, so people can't buy houses, even at the discounted prices we're seeing these days. People who need to get out of their homes, like Julie and Michael, cannot, bringing home prices down even further. The fact that others are simply abandoning their homes to foreclosure doesn't surprise Julie.

"Why pay on a loan that you're not going to see anything on?" she asks.

The family doesn't know where it will be this holiday season. "We'll have to play it by ear," Julie said.

Eviction rules vary state-by-state, and Julie is quickly becoming an expert on such minutia. She said that in their home state of Hawaii, the new owner has 45 days to get the property title, and she thinks they only have 5-10 days once the eviction process starts. So depending upon how quickly things happen, the three of them could be living out of their car on the beach before the new year.

They plan on eventually moving to a home near where Julie's parents live in Maryland, but getting there is another problem altogether. They've scraped up enough money, mostly due to the kindness of others, to get a container of their belongings transported to mainland Hawaii. Thankfully, they have frequent flier miles to get them to the contiguous United States, but due to restrictions on such flights, they don't know when they'll be able to use them fee-free.

Our thoughts go out to Julie, Michael and Conrad, as well as everyone going through the terrible ordeal of losing one's home for lack of loan options, while the banks are getting bailed out. We'll do our best to keep readers up-to-date on this story as it unfolds.

A BUZZFLASH NEWS ALERT