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Hang Onto Your House

Refoel Pride

The legal details of foreclosure vary from state to state, but the process follows the same grim outline everywhere. After the homeowner misses several monthly payments, the bank can take away the house. Millions of Americans are facing a dire struggle to remain in their homes, as the waves of the economy keep pushing them “underwater” – when the value of their homes dips below the balance they owe on their mortgages. Is there any way to bail out, and anyone to trust in the process?

Wednesday, February 01, 2012

house drowningThe headlines have followed one on top of another in the last four years, like cresting waves in a monsoon. Eight million American homes are in foreclosure: their owners are so far behind in their mortgage payments that their banks, the mortgage holders, are denying them the option of paying up, and are moving to seize their homes. Another 11 million households find themselves “underwater” — that is, the value of their homes has fallen below the balance they owe on their mortgages, which some market analysts say is a prime indicator of a mortgage about to go into foreclosure. And the number of jobless working-age Americans — which some pundits dub the “real unemployment rate” — is up to 23 percent, which means countless more face a dire struggle to remain in their homes. The waves keep crashing, and the waters show no signs of receding.

When faced with foreclosure, some homeowners will gracefully throw in the towel and leave. But in the close-knit Jewish community where everyone knows his neighbor’s business, the stigma of foreclosure can be devastating.

“It’s a well hidden secret,” says Rabbi Avrohom Jaffe, executive director of the Southern Brooklyn Community Organization (SBCO), the housing division of Agudath Israel. “Many American homeowners don’t have a problem allowing their homes to go into foreclosure. There is not such a stigma attached to it in the larger society. In the Jewish community, however, it’s altogether different. It’s been very difficult to get our olam to face the problem.”

Pinny F., an investor who already lost three properties to foreclosure in Florida, and is threatened with the loss of two more, acknowledges his own feelings of struggle and shame as he watched helplessly while the floodwaters rose.

“I lasted longer than most,” he said. “Most people around me there didn’t have as much money invested in their properties as I did. They put down $5,000 and the banks wrote them loans on 90 to 95 percent of the value of the house. When the crisis hit, they just left their houses. For them it wasn’t a big thing to walk away, but it was harder for me to face up to it. I had never missed a mortgage payment in my life, and I had put a lot of money into fixing those places up.”

Although the deluge seems to be subsiding — last year saw the fewest foreclosure filings since 2007, the year before the financial crisis hit — and some have even found a way to profit from the crisis, it is already clear that the aftereffects will be reverberating for a long time.



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