Life after home loss - how to cope?
June 24, 2010 6:00 PM   Subscribe

My parents are losing their home to foreclosure. How can we cope with the aftermath?

I'm in my 20s and still live with my parents (my job doesn't pay enough for me to live on my own.) Thanks to the economic collapse, the family income has taken a nosedive. Despite trying desperately to work with the mortgage company directly, as well as with "mortgage relief" groups that have proven to be absolutely useless, the mortgage company has won the case against my parents, and it's only a matter of time until there's the sheriff's auction. My parent's credit rating has tanked because of this, so I doubt we can find another home or even an apartment to move into.

What do we do now? Should I start looking for local shelters, halfway houses, or things of that sort? What can we do with our furniture and other possessions? How do you manage facing friends and family, none of whom know of our situation? How can I apply for a new job when I may no longer have a physical address or phone number? I'm sure this sounds extreme, but I'd rather prepare myself for the worst case scenario that I envision, namely being homeless.

I'd appreciate hearing from anyone who's had to deal with this. Email is
posted by anonymous to Grab Bag (14 answers total) 2 users marked this as a favorite
You should be looking for a place to rent, whether an apartment or a house. It will be harder to find someplace, but it's quite possible. It might help a little if we knew where you were, though.
posted by dilettante at 6:02 PM on June 24, 2010

The reality is this:

1. No matter a person's credit score, there is always housing available to them.
2. If you or your parents belong to ANY social groups, begin outreach about this news.
3. Don't be afraid to ask for help.
4. Don't be afraid to be honest.
5. Don't take the first offer that comes along unless you've seen what else is available.
6. Make a time limit: "In one year, my parents will have their own place again."
posted by parmanparman at 6:07 PM on June 24, 2010 [1 favorite]

Are you just going to assume you're going to be homeless before trying to get an apartment? How is your credit doing? Can you get some roommates for yourself and co-sign on an apartment for your parents? Have you looked on craiglist and absolutely ruled out any apartments you see on there?
posted by amethysts at 6:08 PM on June 24, 2010

Please tell us where you live. You can ask one of the site admins to post this info by using the contact form at the bottom of the page.
posted by alms at 6:09 PM on June 24, 2010

My brother recently went through both foreclosure and bankruptcy. He was able to find a place to rent. When he was looking around, he took the direct approach, and simply told folks what had happened. If people didn't want to deal with him, he was fine with that. He understood their position. But a couple of people were willing to rent to his family, so they picked a place and are doing fine. It's not the end of the world.

I'm not certain, but I think it might actually help to talk with other people about your situation. Use your social network to find a place to live.
posted by jdroth at 6:12 PM on June 24, 2010 [3 favorites]

Don't leave it til the last minute. It's a bad scene. Friends of mine did and it was awful. No-one else knew anything until the day it happened when they were woken up by the bank and removalists. We got a call at 8am to help - I think the only reason we got that is because their families aren't overly helpful/close and we could be relied on to help, not moralise. Also child-wrangling. Prepare physically, not just mentally/emotionally. I think the three are entwined anyway.

Apart from that parmanparman has it right. You can get through it. My friends now live in a different city but they rent a nice place, they work, they got through it.
posted by geek anachronism at 6:13 PM on June 24, 2010

I don't know if this company is a good option for you, but it may be an option. (I heard about this company in a post by the finance blogger Felix Salmon).

You also don't say whether you've looked into the possibility of a short sale or deed-in-lieu. If you haven't, those may be worthwhile to pursue.

I don't know what state you live in; much can depend on that. In a state where foreclosures have to be processed in the court system (a "judicial foreclosure") state, they generally take a lot longer. If you live in such a state, it may be worth your while to seek out an attorney and do your best to buy yourself some time by challenging the foreclosure as best you can. The average length of time between a bank filing for foreclosure and actually taking possession is up over a year in such states, a lot of which has to do with the huge processing backlogs in the courts. It sounds like in your case a petition has been filed, so you're already somewhere down this path, but you may have more time than you think.

In addition, many states now have State-run mediation processes which force the bank to negotiate with the borrower. Connecticut and Florida are two. That may also be an option for you. Again, there usually isn't a guarantee with these things that you will be offered a deal at a rate you can pay. But entering into such a program generally halts foreclosure proceedings while the negotiations take place, for weeks or months.

Your parents may also wish to consider declaring bankruptcy. Again, whether that's a good idea or not depends very much on your particular situation. But it's another thing that can buy time.

Lastly, many servicing companies will at some point offer cash to a former homeowner to cover moving costs if they are still living in the home when the bank has obtained title. ("Cash for keys.") Sticking it out can be worth a couple grand in some cases, enough to cover first, last and security on an apartment.

Finally, I wish to say simply that I am heartily sorry for your loss. I apologize if any of the info I have provided is obtuse or redundant; without knowing exactly where you are or what you've already tried it's hard to know if these are things that will work for you or not. Good luck. i believe you will get through this..
posted by Diablevert at 6:27 PM on June 24, 2010 [2 favorites]

Find a foreclosure/bankruptcy lawyer that does free initial consultations and talk to them ASAP. Depending on your state laws and the specific wording of your parents' mortgage, you may have all kinds of options for staying in the home. I didn't talk to a lawyer until it was too late, and discovered that I could have stalled the foreclosure for years if I'd taken action earlier. Definitely don't wait for the auction -- that was the "point of no return" past which the lawyer told me I was up the creek.

Somewhere will rent to you. Check Craigslist -- a lot of places will list in their ads that they don't do credit checks. Some will also ease up on the credit thing if you pay a few months in advance.

You might want to finance the move with an estate sale of the furniture in the house that you don't want to take with you. If you're going that route, have the sale as soon as possible. Estate sale companies vastly prefer to have their sales onsite in the house and will have to hike up their percentage dramatically if they have to transport your stuff to another location. A lot of them can't have sales unless they're onsite. It's really worth it to do it onsite -- companies that were going to take a 25% cut for an onsite sale had to bump it up to 50% for offsite.

If you're moving to an apartment that will provide appliances like refrigerators, you could sell the ones you own on Craigslist to help pay for deposits and stuff. Just be careful... once the house is sold, anything attached to it (light fixtures, ovens, etc.) is considered part of the house and no longer your property. For example, you could sell a non-built-in refrigerator, but you could actually be prosecuted for theft if you sold the dishwasher.

Right now, a lot of my furniture is being 'babysat' by trusted friends... they're using it in their homes but have promised to give it back to me if I ever want it. This allowed me to get a much smaller storage unit and save a ton of money.

I just went through this earlier this year. If you need to talk, mail me :)
posted by Gianna at 7:17 PM on June 24, 2010

Mod note: From the OP:
we live in Pennsylvania. If anyone knows of any agencies we could contact to help us, please let me know.
posted by jessamyn (staff) at 7:21 PM on June 24, 2010

so I doubt we can find another home or even an apartment to move into.

Don't make this assumption; instead, start looking. Either you'll be able to get one, or you won't, but you shouldn't be going into a shelter until you've actually tried to find an apartment. You may have better luck with an owner/manager landlord, who makes his own rules, rather than a rental managed by a management firm on behalf of the owner or a corporate-owned property.
posted by davejay at 7:31 PM on June 24, 2010

If your parents are religious, have them talk to their parish councillor, or depending on their employment situation find out if their employee support plan offers a phone number for crisis management. These people have experts who can help.
posted by furtive at 7:38 PM on June 24, 2010

so I doubt we can find another home or even an apartment to move into

This is the worst market for landlords since, well, whenever. Vacancies are hitting new records. You are probably vastly underestimating your ability to rent based on your current family income.
posted by dhartung at 10:20 PM on June 24, 2010 [2 favorites]

We had very little trouble renting last year, even though my partner has a foreclosure. We were very upfront about it, our landlord said they've been seeing a ton of people with them, and they were looking more at income now. YMMV, but don't assume it'll keep you from being able to move.
posted by Zophi at 8:24 AM on June 25, 2010

Hey, you might want to read this article; it' possible that this strategy will work for you as well, (ask your attorney).
posted by SecretAgentSockpuppet at 1:34 PM on June 25, 2010

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