Wednesday, January 21, 2009

Odd Financial Situation I'm In

It's hard for me to believe that it's been over a month since I've updated this blog. In that time I've been entering a diary over at The Daily Kos, mostly because most of those entries fit better there, but also because more people check out my entries there. I will, for now, continue to update my blog here, but I will also continue to evaluate my using this blog from time to time.

Now, here's my most recent entry. It's also probably my most personal one.
I’m going to do something I haven’t done before. I’m going to open up about my current financial situation. The main reason I’m going to open up here is because in all of my years, I find myself in a bizarre situation that I haven’t ever been told to expect.

Whenever I’ve committed thoughts to keyboard, I’ve always held back a little bit from my private life, which I understand includes ones financial life as well. I’ve not understood why this should be the case, since politicians and celebrities seem to have so little financial privacy, but I’ve held back in order to protect those around me from some… unknown, unseen, possibly legal liabilities.

So, with no further beating around the bush, here’s the background of my situation. Like many Real Estate Agents in the last few years, I got duped into taking one of those toxic loans out in order to buy a nice new home that I should have known I wouldn’t be able to afford once the loan recast. I can’t really remember the reasons why I would do something that seems so dumb in hindsight, but I’m betting the banks are thinking the exact same thing right now, only from the other side (“Why did it seem like such a good idea to loan money to people while making such a point to make sure we knew nothing about their finances?”)

So, about a year ago, under mounting financial debt and looking at a home value about 2/3 what we paid, we looked at our choices. We could file for bankruptcy, go through credit counseling, have the counselors tell the judge that we couldn’t pay the debt, have the court auction off everything, etc., or try something else. The something else that seemed most honorable to us was to pay off our credit cards, which in hindsight seems like the best thing we could do (Citibank recently increased their lowest credit card interest rate to over 20%!) while negotiating with our mortgage company in order to see if we could change the terms of our mortgage.

I’m going to do something I really didn’t want to do at this point: Name the bank. I think you’ll understand why later. To the credit of Indymac Federal Bank, even while they were going through all of their problems, they kept working with us. At least they did until last September. They asked us to get our financial information together for them and call them back with the information. I got the information, just as they asked, and called them back at the number they gave me, and ended up leaving them a voice-mail message. Next day, I left them another one. I waited a few days, called them back, and left another voice mail message. Then I did the same the next week. The week after that, I did the same thing. No replies came. No calls, no letters, no emails, no faxes, nothing. I called again the next week. I kept this up until around the middle of October, figuring they were backlogged, and would get back to me when they had the time.

Then came mid December. I got a letter from Indymac telling me I owed them roughly half of our joint household income by January 19th, or they would start foreclosure proceedings. I called them back at the number provided…and left them a voice mail message. And another one. Same thing the next week.

I figured it was time to up-the-ante, so I contacted my Congresswoman’s office and left a voice mail for her assistant who handles these things…and got no response.

So last week, we contacted a company that supposedly will negotiate with our mortgage company for an up-front fee, and I was going to go with them until I went to the California Attorney General’s webpage and found out that it was illegal for them to take a fee from us until after they had provided the services. Yesterday I called Indymac and after leaving my voice mail message in disgust, I called the Consumer Credit Counseling Service in my area, as suggested by the AG’s office, and was surprised to hear only confusion on their end. They suggested that I try to find a branch of Indymac and go in and talk to them, even though there are no branches in my area (in fact, the nearest branch is an 8 hour drive away). That was their best suggestion after a roughly 20 second phone call. No service from them was suggested or provided to this consumer regarding credit or counseling, so I’d say they failed completely.

To me, this is a bizarre situation. In my experience, and in all of the classes I’ve taken from high-school on, I’ve been told that the person who is owed money is the one that constantly tries to contact the person who owes them money. This is completely the opposite of my current situation. I’ve been calling them for MONTHS, and I haven’t even gotten any kind of confirmation that I’ve contacted them. I feel like I’m hounding them. I imagine them cowering in some room someplace, saying “Don’t answer the door, that guy owes me money!” It’s nuts. We hear all the time that if you’re in financial trouble that the worst thing to do is to stop talking to your lenders. That’s not my problem. They have stopped talking to me, even before we could talk about a possible solution! Is this the Indymac Federal Bank who was supposed to be a model of working things out with their customers, as was reported just a few months ago?

I hate to say it, but the real feeling I have is that this problem is so large for these people that they actually have no idea how to tackle it. Indymac can’t figure out what they can do, Congress can’t figure out what they should do, and the CCCS doesn’t know who they are, what day it is, or remember how they got to work (“What’s that ringing thing? What happens if I pick this thing up?”) The problem of foreclosures has gotten so huge that they are unable to figure a way out, and have decided to simply shut-down all thought and hope the automatic systems take care of the problem, or that by some miracle, it simply vanishes; the nightmare over with the dawning of a beautiful new day. Unfortunately, the dawning morning is the dream, and the financial crisis is real.

My family and I would like to keep the house, but we have completely lost our investment in it. The question is: “Should I keep plunging money into an investment that is currently, and probably always will have a negative return on my investment?” The businessman in me says no. Any further investment is money lost, unless Indymac can reduce our payments to a reasonable level. No offense intended, but that’s the right business decision. However, this is about family. If I could work out something else, I would, but it’s going to require Indymac to at least return my phone calls. The question for them is: “Do you want to definitely lose 2/3 of your investment, or find some way to lose ¼ or less (or possibly nothing, but no more than 2/3)?” Their current actions say they would rather definitely lose big than risk losing small. They know where I live and have all of my contact phone numbers.

I would love to hear from other people. Do you have any suggestions on what to do next? Are you in or have you been in a similar situation? Do you work at Indymac and know what is happening? I’m completely at a loss, and for once in my life, I have no idea what to do next.


Anonymous said...

IndyMac Bank forced me to walk away from my HOME due to their non-response of my simply trying to re-finance my loan BEFORE it adjusted. I HAD an 850 credit score, a lawyer writing and calling them for months with no response except form letters. To date, it's been 17 months of trying to resolve this. I moved from the property before they ruined my perfect credit. I have lost over 300,000 - most of my retirement dollars. Is this legal on their part?? Is there anything we all can do? There must be thousands in the same situation.

Ed Smallwood said...

I cross-posted this blog entry at The Daily Kos and got a lot of helpful (and just a few not-very helpful) comments. You may want to check it out at