A Spoonful of Foreclosure…

I saw another movie about foreclosure over the weekend.

I’ve already seen The Big Short, 99 Homes, The Grapes of Wrath. This one fit right in: Mary Poppins Returns.

You read that correctly, the new Mary Poppins movie centers around the Banks family (um, I just saw the irony in their name) struggling to keep their home. Good ol’ Disney has added foreclosure to its repertoire of tragic plot lines.

Of course the foreclosure in Mary Poppins Returns is unrealistic and much more nightmarish compared to how foreclosure actually works here, in the U.S. and in Connecticut.

The themes were similar, and they got one right, but most of them wrong.

They nailed the main theme: when a crisis hits and causes financial struggle, usually a household can survive that; it’s when a SECOND crisis hits when the mortgage goes unpaid.The first crisis in the movie was the Great Depression of the 1930’s. I won’t give away what the second crisis was, but any fans of Disney can take a wild guess…

The movie gave the impression you have little to no time to work out a solution with the bank or find a solution that is better suited for your household. You don’t get a notice nailed to your door with only five days to pay up or move out like the Banks family did. You do get notice of foreclosure and a relatively reasonable amount of time in Connecticut to work things out with your bank. We even have a mediation program that slows the whole process down.

The Banks family focused on one possible way to solve their problem. You might think you have only one option too, but time and again my meetings with homeowners end with us making a list of solutions to getting out of foreclosure.

The bad guy in the movie was the head of the bank: he sabotaged the family’s attempt to solve the foreclosure, he was eager to foreclose not only on their home but multiple others, even setting quotas of foreclosures for the bank’s attorneys to fulfill. He went so far as to say he wanted THEIR home. This is how most homeowners in the U.S. feel who are in foreclosure—I’ve written about it before, it feels personal when it really isn’t. No, your bank
doesn’t want your house, but despite that I can’t explain the zeal with which they move to foreclose.

And you have a lot of stuff; years worth of stuff to sort through; so moving is going to be tedious, take you weeks or months, and be very emotional and difficult. The movie got this totally wrong with how it portrayed the Banks family’s resignation and bright attitude about leaving their longtime home; it was – like Mary Poppins’ henanigans—unrealistic, without the feel-good magic.

Last but not least, the family had no lawyer. This allowed the head of the bank to conceal valuable information from the family, to deny them any options other than full payment. They had no one to speak for them, to keep an eye out for other ways to solve the problem or to negotiate a payment plan. I see this a lot—a homeowner will just take a bank’s word for it when they are told what their options are or what they have to do and by when. This usually ends up with a shorter timeframe for leaving the house- and when you’re facing a deadline, five months
can feel like five days, the amount of time the Banks family had to pay up or else. The movie got that right—without help, you’re on your own, scrambling for a solution while fighting the clock.

I guess all the exaggeration makes for better on-screen drama. But who needs that in real life?

It’s About Neighborhoods

A friend of mine came by the office early morning, the Friday before Christmas. He’s from what we would consider a ‘well-to-do’ town in Farmington Valley. About thirty seconds after he took a sip of coffee he told me this: he took a slightly different way to Avon Mountain that morning and drove down a popular back road he hadn’t taken in several months.

He was shocked. Over a short stretch, maybe half a mile, probably less, he counted five houses either abandoned or in foreclosure.

Smack in the middle of nice homes with big yards and lots of trees. The other houses were so well maintained, the lawns neat and raked, that the empty houses just stood out.They were eyesores.

They did, in fact, take a lot away from the rest of the street. My friend went on to say that he knew, because this was, after all, his town, that it was just an unhappy coincidence that that many houses were in foreclosure in such close proximity. There wasn’t a water problem, the road wasn’t about to be widened, this isn’t an area afflicted by crumbling foundations.

It was just a weird coincidence. But, he said, if he wasn’t from town and he noticed so many houses like that almost in a row, he would have wondered what was going on. And, having to wonder ‘what is going on’ in a neighborhood is hardly conducive to real estate values. Nor is a fading red Colonial with broken shutters, a partially collapsed garage, and two years’ worth of leaves in the gutters.

It’s always been my position, my belief, that we do everything we can to save homes in foreclosure because it’s about more than just that home, that house. It’s about the neighborhood. And beyond. Foreclosed on homes that sit untended destroy home values in the area, lower home values lead to lower tax bases, which leads to hits on schools, infrastructure …. you get the picture.

As if to drive this home to me that Friday morning, an hour or so later I caught a short piece n NPR’s Morning Edition. It was about the burned out town of Paradise, California, the town decimated by the wildfires. Houses did survive the fires, apparently it’s not very expensive to make a house almost fire proof – special roofing, eaves, keeping fire resistant trees like maples while getting rid of flammable ones, keeping dead leaves and pine needles well away from the house.

NPR talked to some of the homeowners who’s houses survived the fires. Lone houses in a sea of ashes. One quote about an older couple who’s home is standing untouched sums it up:

Their plan had been to sell in a couple of years so they could retire in Chico. But with the uncertainty in the real estate market and the future of Paradise, that’s all on hold now.

It’s the extreme – very extreme – example of my worst case neighborhood scenario. But there are a lot of people here in Connecticut – perhaps the people on the street my friend drove down, more likely the many neighborhoods and towns with so many houses afflicted with crumbling foundations – who also have the long term goal of selling their homes to move away for retirement – who are facing the same fate, albeit much slower.

It’s never about one house. It’s about neighborhoods.

 

Some Peace of Mind This December

The holidays are here, the end of the year is looming large, for many it’s time to tidy things up before 2019 rolls in and things get going again. Over the last few weeks I’ve written about Lodge 49 and the fact debt (of every kind) is so prevalent on the show, it’s another character; and I relayed happy news about settling judgments and liens for clients looking at foreclosure.

Everyone, I think, can identify with the residents of Long Beach in Lodge 49, beset at every turn by debt, plunging home prices (the area just became a superfund site), foreclosures, and more. Everyone, I think, can vicariously enjoy hearing about a judgement and/or lien being settled in the borrower’s favor.

But, in my experience, that doesn’t translate – often enough, at least –  to the many, many, people out there with the same problems I write about getting – really getting – that there are solutions for them. In many cases, several solutions.

Everyone can be LIz, the Lodge 49 character who walked into her bank and took care of her debt problem forever . . . the only thing you need to get started is to understand you have options.

Liz figured it out in the season finale.

Well, December is our season finale and the time to get some peace of mind, probably the commodity I deal in the most.

It’s simple, if you are looking a a possible foreclosure, have judgments and liens that threaten your home and/or continued financial health, are facing a crippling crumbling foundation situation, are in foreclosure and are scared … or baffled … or confused …

. . . come and talk to me.

Give yourself a consult for Christmas and give yourself some peace of mind. The one thing I can tell you sight unseen, you have no idea how many options you have.

Debt, Judgments, and Liens

Last week I wrote about debt and AMC’s Lodge 49. A show in which debt is so pervasive it’s another character. This is the flip side of that conversation – the end result of many debts.
I don’t know about you, but sometimes my idea of fun is getting judgment liens paid off.  Yep, that’s right- it’s kind of a cool challenge and can be really satisfying. Taking care of judgment liens has been a satisfying part of being a lawyer for a long time, the letter below is to Attorney Abraham Lincoln about just that.
Last month a client, who was in foreclosure due to unpaid property taxes, found a buyer for her home.  The house needed a lot of work, she was unable to keep up payments on the taxes, and decided to sell.  She had about a half dozen judgment liens that resulted from old unpaid credit card accounts that remained outstanding.  In order to close, I had to track them down and get them settled.
At least there was enough money from the equity in the property to pay them at closing.  If this were a short sale, or if there wasn’t enough equity to get them all paid and still leave her with some cash out of the deal, we probably wouldn’t have bothered. (Then my strategy for her would have been to keep her in the home as long as possible and eventually move when the time came.)
Four out of her six unpaid liens were simple to deal with.  In addition to getting the lien information from the closing attorney’s title search, the original case information is usually available on the court website– www.jud.ct.gov.  I put my client’s name into the search field and found the cases, including the names of the lawyers who initiated each suit against her.  I just had to call them up and make settlement offers.  We averaged just about 50% overall on those.  The lesson here is it is always worth trying to get a discount so that the homeowner can keep as much of the cash out of the closing as possible!
I’m still tracking down the other two liens.  Most of the cases against my client were brought by third party “debt buyers”, companies you’re probably familiar with such as Unifund, Midland, CACH, Portfolio Recovery, Velocity Investments, Cuda & Associates or Lienfactors, etc.  The problem here is that the law firms that get the judgments don’t often continue to service the judgments, especially 5 or more years after the judgment enters, which was the case with my client. I know with a little more effort I’ll find the companies currently handling the judgments and get them settled and paid.  But in the mean time, we have to set aside the full amount of the judgment for these two liens in order to close, and my client won’t get anything that is left over until we know what these companies will accept in settlement.
She had another creditor who obtained a judgment but had not filed a judgment lien.  We still settled that one out because I feared that if we did not, and sold the house, the creditor’s attorney would discover my client disposed of her only asset and it would cause a major problem later.  It hurt because it was the highest balance of any of her outstanding accounts, but the closing attorney and I decided it was the right thing to do.
I regularly recommend selling to people who have equity but cannot afford their homes in the long term.  My experience with the creditors’ bar is that they will always take a settlement offer, no matter whether the account has been reduced to judgment and no matter how old the judgment is.

The Debts of Lodge 49

The first season of Lodge 49 ended a few weeks ago (along with the latest season of Better Call Saul, I’ll write about that later). I waited to write because this piece contains a mild spoiler.

Lodge 49 is … well, it’s hard to categorize. It’s gentle, a bit melancholy, smart, sometimes very funny, very well acted and pretty much a ten-episode shaggy dog story.

There are great characters who are very real people, it occurs in Long Beach, California which is an excellent stand-in for so many things about 2018 it would be impossible to list, there’s a mystery out there somewhere, there’s some intriguing as yet undisclosed mysticism swirling around everything and everyone.

So, yeah, I liked it. I was so engrossed in it I didn’t realize until forty-five minutes or so into the last show – and I did so with a real jolt – that the entire show was about . . . debt.

The debt of the middle class in 2018, with Long Beach still feeling the effects of the Recession.

I was jolted because looking back I saw it was there all along. I’ll bet ten minutes doesn’t go by – per episode – without someone talking about debt – their own, someone else’s, the Lodge’s (it is, after all, a building with a mortgage).

Debt is everywhere and when people aren’t talking about it there are signs in the background blaring it. Foreclosure signs on boarded up buildings, empty condos, ReFi billboards, more, everywhere.

A main character is a pawn broker. The pawn broker isn’t nasty, makes almost fair offers on property, seems to have a sense of humor, is a rock-solid businessman.  He also makes payday loan, title loans, and personal loans with interest rates around the thirty-percent mark. He also tells every ‘client’ exactly how stupid they are for taking whatever loan he’s offering before they put pen to paper.

The protagonist, Dud (yes, no ‘e’) is into him for big bucks and his car. Dud’s father owned a pool servicing company, went out to surf one afternoon and never came back. The business had loans far in excess of its value. Their house was foreclosed on and auctioned off.

Dud’s twin sister Liz owes the bank $80,000 – she co-signed a business note for her father. She’s obsessive about paying it down, makes every payment on time even though it stretches her budget to the breaking point, has been paying for over a year when she is shocked to find she has only been covering the interest.

Ernie works for a company that can’t pay commissions until it gets advances, he’s into the pawn broker. The lodge itself is being foreclosed on. The mysterious rich guy who pops into Dud and Ernie’s lives (a great Bruce Campbell) is dependent of leveraging – he borrows to invest. The people who bought Dud and Liz’ childhood home at action are clearly underwater, all the land in town is about to be declared toxic, they’ll never resell.

Debt, debt, everywhere. It’s not oppressive, it certainly doesn’t put a damper on the show, but it is always there, like another character.

No one does anything about their debt, except add on more in the hope of getting by long enough to do . . . something that will maybe fix it, . . . until the very end, the tenth episode/season finale (that raised more questions than it answered but made me want more).

That debt finale: Liz walks into her bank to talk to about her loan. The ever helpful, ever cheerful, manager says “The outstanding balance is eighty-thousand, five hundred and thirteen dollars.” Liz answers, “That is outstanding,” – a line I am sure I will use one of these days.

Liz then explains that she ‘really doesn’t have a place in her life’ for the debt anymore. She slams her entire life’s savings on the table, eighteen thousand dollars or so and explains – I won’t get into the specifics because those are spoilers (I think) – this is all you’re ever going to get from me.

The shot of Liz back in her car with her ‘account closed/paid off’ paperwork is outstanding.

It, of course, doesn’t really happen that way but it’s not a bad representation of what can happen if a debt is approached correctly, (check out my book for more on this). The end result, have the debt go away, that’s just priceless. Liz’ relief is palpable and absolutely spot on.

You’re not a character in a prestige series TV show, you don’t have to live with debt.

Surviving Debt: Expert Advice

Some people just like self-help books. Some people (like someone I am related to) always have one open on their nightstand and seem to have read them all. I’ve only recently gotten into them and that is to supplement the in-person help I have been getting (specifically, on managing my business).

If you’re a self-help person, you have to check out Surviving Debt: Expert Advice for Getting Out of Financial Trouble, published by the National Consumer Law Center, now in its 11th edition. It covers almost every personal financial issue you can think of, and is only $20. CLICK HERE to purchase (I get no benefit from this other than to share with you a really valuable resource)

You can even get free content from the book by clicking here. 

Let’s say you had a car repossessed a few years ago, and you can’t figure out how to pay off the debt resulted from that. Or you want to know which of your accounts to pay first. Surviving Debt has a chapter for that. If you’re the type of person who can read instructions and advice and follow through, then the price tag on this book is more than worth it. Maybe you’re shy about talking to someone about your finances, or want to know if you really are as bad off as you think you are (if I had a nickel for everyone who was afraid to pull their credit reports!), try Surviving Debt first. Then let me know if it was helpful, and which sections were the most relevant to you. You may need some follow up help, or have questions about your options. After all, this kind of book doesn’t (and can’t) provide you advice specific to where you live as each state is different in how debt is pursued and your options are different depending on which creditor you are dealing with, whether you have been sued on the account or whether it is in collection or not. Foreclosures especially are different in every state, so maybe after reading about your particular problem you will feel better prepared to ask questions and start tackling your situation with a live professional.

This book, and the chance to read parts of it for no charge, was too good an opportunity not to share with you. Again, I get no proceeds from the sale of the book (I don’t even keep the proceeds from the sales of my own book!), I just wanted to make sure you knew about it, especially as many of you are looking forward to a new year soon and in my experience, most people have something money-related on their New Year’s resolution list.

I Call BS . . . (on everyone, myself very much included)

“I call BS”

The students of the high school in Florida who suffered that mass school shooting earlier this year adopted the battle cry “I call BS” in the face of politicians’ empty promises to stop gun violence and to stop taking money from the gun industry.  If anyone dared tell the students they would work to make a difference and acted in a way that said they did not intend to, they called out the BS.

Good for them.  Because we are too nice and we don’t call out each other’s BS enough.  And because of that many of us never get out of our own way.

We all do it—we all have some BS we are hiding behind.

“I want to lose weight.”

“I know I should exercise more.”

“I have no money.”

All true statements for many of us.

But I call BS.

If you want something, work for it. If you know exercising is good for you and you don’t do it, then start.  You say you have no money, but do you really keep track of what you spend your money on?

I don’t call you out on enough of your BS.  I hear you say you want things but you don’t do what you have to do to have those things.  Please just be honest about WHAT YOU WANT MORE than the things you say you want.

If you want to lose weight, but you love chocolate chip cookies, and you keep eating the chocolate chip cookies, then you want the cookies more than you want to lose weight.  So don’t BS me about wanting to lose weight.

If you know you should exercise more but go home at night, eat dinner and then flop down on the couch and turn on the TV, then you want to watch TV more than you want to exercise.  So don’t BS me about not having the time or not being “able” to exercise.

You say you have no money but you stop to buy a coffee every day and buy your lunch at work and go shopping for clothes a couple of times per month or lend friends and family members the money you do have.  So don’t tell me you don’t have money—that stuff adds up.

I sound really harsh here because I have been spouting my own BS for a couple of years—I say that I want to help more and more people and have a large law firm but I haven’t done the work it takes to get more clients.  I’ve been BS-ing myself, my husband, my staff and even the homeowners out there who can’t find their way to me because I haven’t done what I need to do for them to know I’m right here, ready and able to help.

That BS stops now.  No more pretending to want something but then not taking the steps to have what I want.  No more saying one thing and doing another.  I invite you to call me out if you hear BS from me.

You ready to join me in a BS-free life?

Living Her Dream

Quite often I find myself in conversations with people who say things like, “When __ happens, then I will do ___.”  For example, “When I retire, then I will play more golf,” or “When I earn more money, then I will take a vacation,” or “When I have more time, then I will volunteer.”  I have a few of those on my list too.

I have a friend, well actually someone I would feel lucky if she called me a friend, whom I met many years ago at a networking event and we have seen each other at various events and meetings over the years.  I knew that she spoke some French and German and did things like organized get-togethers for French-speakers and German-speakers, and that she played piano and organ.  She is also a real estate agent and that is how I met her.  But unlike all the other small business owners I have met over the years, she isn’t waiting until her business “takes off,” or until she makes a certain amount of money, to do the things she enjoys and that would make her life and the lives of others better.  As small as it seems to get a bunch of people together to practice speaking French once per month, she takes the time to do it.  She doesn’t see it as taking time away from working and making money and therefore something she shouldn’t do or can’t do or that she should wait to do.  It’s important to her, it’s important to others, and it’s something she isn’t waiting to do.

I learned recently that she has added yet another interesting and generous activity to her weekly routine—she plays the piano and organizes a choir for people who get lunch at a particular soup kitchen in Hartford.  The meal is served at noon, she arrives at 11 and anyone else who is there who wants to sing can join the group.  The first week, back in May, there were apparently only about four reluctant participants.  But as the weeks passed, and she continued to appear and warm up the piano, more and more people have been joining.  One week there were over 20 singers!  They also recently sang in State House Square and Kathleen Malloy, the governor’s wife, joined them.  After each session now, the singers tell her how much they enjoy the choir, how it makes them feel good and especially after meeting Mrs. Malloy, how they actually feel like someone, for the first time in their lives.

What is also interesting about this is she had no idea what the result would be, how the option of singing for a little while before eating lunch would affect the patrons of the soup kitchen, how it would change their lives or hers.  But she did it anyways.  She stepped into the unknown and just went with it.

Just an hour per week, and she is making such an impact.  Without concern that she could be out showing a house to a client, and maybe making a little more money if she worked instead of volunteered.  She isn’t waiting to live her dream, she is doing it now.

If only all of us took an hour per week to do what makes us each feel happy, something we know is doing good for ourselves and others, what would our communities look like?  How much better would our little world be?

I’m sharing this, instead of my usual stuff about foreclosure and mortgages and the headaches of being in debt because I hope highlighting what my friend is doing will inspire you to not wait to do the things you want to do until ___ happens.

Let me know what you think, let me know if you are already living your dream, or what you plan to do instead of waiting for the right moment, the right amount of time or having enough money.

99 Homes

A week or so back, I was at a conference table with another lawyer and a client. The subject was, of course, debt and a pending foreclosure. I’d known the attorney for some time, always thought of him as a sort of analytic, ‘just the facts, ma’am’ kind of guy.

So, he shocked me when he, emotionally, started talking about the movie 99 Homes, several years old now, but … well, here’s what I wrote about it after it came out:

99 Homes is a kick in the stomach. It’s visceral, it’s brutal.

It sarahblogbegins with a court hearing in Orlando, Florida. A twenty second hearing during which a character, alone before a judge in a chaotic courtroom is told his paperwork is not in order and even if it was it’s too late and he will be evicted by the bank in the morning. Quick, devastatingly direct.

The subsequent eviction scene was tense and just heart-ripping. It was hard to watch.

Something really hit me in the brief moments before the sheriffs come –  it’s a quick, easy to overlook shot, though that it’s repeated later in the movie, a few times actually, albeit in different forms.

This is it: the homeowner’s sitting at a kitchen table buried in paperwork. He’s frantically burrowing through it while calling attorneys on his cell phone. It’s crystal clear he’s ignored dozens – at least – notices from the bank, court, and the sheriff’s office.

Later, as the movie takes some dark turns and heads toward the ’99’ homes of the title, it’s obvious that most of the people Michael Shannon (great in this, as in almost everything else) is evicting have done exactly the same thing – they’ve ignored notices, even ones stuck on their front doors by day-glo red tape.

99-homes-18It’s a theme I’ve explored more than a few times and really thought I had a handle on. But seeing it … was hard. There’s a natural reaction to wanting bad news to go away without having to do anything. There’s the depression that hits, the ‘nah, this isn’t really happening’ denial … well, really most of the steps normally associated with the grieving process.

Except here, as so vividly shown in the film, there is no acceptance, just sheriffs and a bank rep at the door to wrest the home away.

I’m still a little rocked by this but I’m pretty sure the next time someone hesitates before hiring me I’ll just tell them to watch 99 Homes and get back to me.

My First Solo

It was twelve years ago today, October 2, 2006, that I went solo.  I actually didn’t have much of a plan. I had obtained a position reviewing documents for large class actions which I could do from home on my computer. That was going to pay enough to pay my bills. That’s as far as I had gotten with my plan.

I had been working in consumer protection for four years, helping all kinds of people out of all kinds of bad deals, protecting them from harassing debt collectors, unwinding their complicated identity theft problems, and recovering money taken by home improvement contractors, car dealers and even dating services.  But even as fulfilling as that was, there was something missing. I didn’t know what, I just knew I needed a change. I didn’t really look around for other jobs, but I found the document review opportunity and thought it would allow me to rethink my path as an attorney.

Within a week or two, my old boss called asking if I was interested in helping all the people that called his firm looking for help defending against credit card and medical collection.  So I shifted from being the lawyer that brought suit to being the lawyer that defended clients in court. And no one else was really doing that with any regularity.

Almost exactly two years later, though, the economy dramatically shifted when the real estate bubble burst and the country went into recession.  The need for lawyers helping homeowners in foreclosure increased dramatically and as I had already handled a few foreclosures for homeowners, I was in position to take on more of these cases.  Now I have the largest foreclosure defense practice in the state.

This did not come easy.  Helping a homeowner save their home from foreclosure is labor-intensive, document and paperwork intensive and takes a lot of time and patience, both on my part and the part of the homeowner.  I have had to hire staff to handle the paperwork, answer the phones and manage the office. This was a scary process- I used to work alone in a spare bedroom, then I rented a small office, but now I need space for four employees, and then some.  This all needs to be paid for. Everyone wonders how I do it: “How do you get paid if your clients can’t pay their mortgage?”

Good question.  Probably the most important lesson I’ve learned from growing this business is to figure out what clients really want.  When you think about it, people pay for the things they want. If they REALLY want that Starbucks coffee, they will have the money to pay for it.  If they REALLY want a Lexus car, they will find a way to pay for it. And if they REALLY want help in court when their home is in foreclosure, they will make sure to pay their lawyer for that help.  

I did assume for a long time that everyone wanted to save their house, or that everyone who called me wanted to pay for legal services.  I’ve been working on how to have the conversation to figure out what people really WANT. I’ve learned it’s OK to not want to keep your house, and it’s OK if people don’t think paying for a lawyer is worth it.  I want to work with the people who REALLY want legal help from me, people who value having a lawyer by their side, a lawyer who will explain the process to them, who will walk them through each step and clarify what is going on in court so they aren’t so confused, don’t feel helpless, and aren’t spending any more sleepless nights over their foreclosure.  

Even better are the clients who know we will solve their legal problem and who want to do better in the future.  People who are motivated to manage their money so they will NEVER be in foreclosure again, and who will have savings and a retirement plan and a future to look forward to.  Because I’ve learned it was never the foreclosure that was the problem, that was just the symptom of many decisions over the years that led to an inability to pay the mortgage.  I can treat the symptoms, but the fulfilling part is working together with clients to cure the underlying problem.