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Senior Contributor
MattH
Posts: 3,240
Registered: ‎04-03-2008
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Friends about to lose their house

[ Edited ]

Here's a sad story that sounds like something on Dave Ramsey's radio show: my wife got an email from some folks we hadn't heard from in a while and it sounds like their situation is pretty desperate.  He's been out of work for seven months, both of them have been applying for every possible job, etc., but all they have found is low-paid part-time work at jobs that would pay about 25% of what he used to make if they could get full-time hours.  At this point they've run through their savings and cannot pay the mortgage.

 

It does sound like they waited too long before getting serious about making needed adjustments and even now are in some serious denial about their situation: they still want to keep their kids in private schools, still want to keep their kids doing some expensive sports, etc., and still hope somehow to avoid giving up their house.  When I mentioned their situation to a colleague at lunch today he replied, "if I get laid off, one of the first things I'm gonna do is spend lots of time fixing up my house to maximize its value, then put it on the market as soon as possible!"  I'm not sure if my friends have any equity in their house, but since they are in Omaha they may well have some, I don't think Nebraska had as much of a real estate bubble as the coasts did.

 

It was surrealistic to read about private schools and food stamps in the same email message, I must say.

 

 

 

Message Edited by MattH on 08-10-2009 06:54 PM
TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
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Established Contributor
happy0510
Posts: 808
Registered: ‎03-07-2008
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Re: Friends about to lose their house

Hi Matt,

 

It sounds like your friends are direct victims of the economy.  A lost job period.  However, I believe they are making the right decision for keeping their kids in private school, "expensive" sports, etc. I praise them for that.  The children are the future and whether they end up renting means nothing in regards to the kids academics & extracurricular activities.  Life does not stop because of a foreclosure.  May God Bless Them!!!

 

Take Care,

 

Happy:smileyhappy:


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mickie08
Posts: 3,299
Registered: ‎04-22-2008
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Re: Friends about to lose their house

MattH

 

Good luck to your friends.  As far as your comments go, I have to say that it is pretty ridiculous to hear the words private school and food stamps in any letter.  Given the chance, I would keep my home over all of that stuff for a very simple reason.  The activities and the schools can be compensated for.  If I was not working full time (sounds like this is the case with them)  I would have plenty of opportunities to work with my kids on their school work and make up for any loss of schooling they got from transfering to public schools. (unless those schools were notoriously unsafe i.e LA public schools or something)...  As far as the sports goes, there are almost always community sports leagues that are very inexpensive to get involved in.  Maybe if my kids were high school age this might be more of an issue to me ( but of course at that age I would give them the choice to work some to help pay for the activities.)

 

While I agree that out children are the future, I have alwasy strongly believed that it is how tey are raised, and a stable home (in more than just location) that accomplishes this.  Private schooling may accentuate a kid that is already doing pretty good, but it really comes down to parental involvement and the kid having a sense of security more than anything else. 

 

Having said all that, I have been out of work for 3 months (kness injury, surgery this Friday) and it really made me re-think priorities alot.  Now I am doing alot mroe with my kids, am more involved with their work, etc. And, I have learned huge differences in what are necessities verses non essentials.  I still have my flatscreen and cable, ut not 200Channels, and we now make sure to make meals that last for a second serving as much as possible, etc.  Eating out is only done when there is a deal or coupon that pretty much makes it as cheap as cooking, etc.  The hardest part for alot of people is admitting that they are really in trouble and making adjustments right away.

 

 

Senior Contributor
MattH
Posts: 3,240
Registered: ‎04-03-2008
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Re: Friends about to lose their house


mickie08 wrote:

MattH

 

Good luck to your friends.  As far as your comments go, I have to say that it is pretty ridiculous to hear the words private school and food stamps in any letter.  Given the chance, I would keep my home over all of that stuff ... The hardest part for alot of people is admitting that they are really in trouble and making adjustments right away.

 

 


Exactly my thinking: they should have done more to cut expenses sooner in order to make their savings last as long as possible, and indeed maybe should have done more while they were making good money to prepare themselves for possible trouble.  The danger signs were there long before the crash, I myself began to worry about the housing market in 2006 when I noticed half the books in the personal finance section at local bookstores were "make money fast by flipping houses."

 

TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
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New Contributor
GRILLMASTERNEEDAHOUSE
Posts: 68
Registered: ‎05-26-2009
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Re: Friends about to lose their house

Hey Matt,

 

I hate to say it but their priorities are indeed jacked up. I think one of the biggest misconceptions is that a student can not get a quality education in a public school. Obviously, there are factors in public schools to think about, safety, lack of resources, student to teacher ratio, etc, but there are very good public schools out there. You can even send your child to another school district if you talk with administrators. The bottom line,  you can get a quality education for free. We know many have the mindset from birth they child is going to a private school period. I've seen more kids just us jacked up coming out of private schools as public schools because its not necessary the schools more than its parent involvement and love. Kids adapt to situations more than we give them credit for. I didn't know my family was broke as hell until I became an adult and reflected back. I never had to worry about food, water, shelter, and love and had the greatest childhood. There are so many free community activities which is another needless expense. If they feel that strongly about their kids in private schools and expensive hobbies, try to sell the house and move into something cheaper. If their home is a priority, that stuff has to go. Something is going to give making 25% of your normal pay. I just hope they recognize it before its too late. My prayers goes out to them.

Grill Master now has a house! Closed 8/26. Yay!
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SonorityGenius
Posts: 729
Registered: ‎10-21-2007
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Re: Friends about to lose their house

Wow, they possibly ate through their savings and HELOC for PRIVATE schools and SPORTS?!

 

One of the very first things ANY economist tells you in this recession: CUT ALL UNNECESARY EXPENSES;

 

What's more important? Mortgage payment OR Hockey tournament?

 

Public schools for one year or more will not have significant impact on their kids' lives as losing their house, finding newer place to rent, having jacked up credit for a prolonged period of time, but above all, when you misplace kids from their HOME, it is a much more of a life changing impact than cutting their sports and private education..

 

They should have done much more cost cutting, paid on the mortgage, than see if they qualify for the DU REFI plus program and might have had a chance to KEEP their home.. they probably have invested much more into the home than they have into the private schools!

Senior Contributor
MattH
Posts: 3,240
Registered: ‎04-03-2008
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Re: Friends about to lose their house


SonorityGenius wrote:

Wow, they possibly ate through their savings and HELOC for PRIVATE schools and SPORTS?!

 

One of the very first things ANY economist tells you in this recession: CUT ALL UNNECESARY EXPENSES;

 

What's more important? Mortgage payment OR Hockey tournament?

 

Public schools for one year or more will not have significant impact on their kids' lives as losing their house, finding newer place to rent, having jacked up credit for a prolonged period of time, but above all, when you misplace kids from their HOME, it is a much more of a life changing impact than cutting their sports and private education..

 

They should have done much more cost cutting, paid on the mortgage, than see if they qualify for the DU REFI plus program and might have had a chance to KEEP their home.. they probably have invested much more into the home than they have into the private schools!


Exactly my thinking, though I don't know if they had a HELOC or not (actually I hope they did not have a HELOC, I hope they still have some equity left), all I know is the one email message (my wife and I are still considering how to reply to that email message with its mixture of hard reality, magical thinking, and self pity) after a couple years of hearing nothing from them.  But from what they said in that email message it certainly does not sound like they have been very realistic about their situation if even now they are still trying to keep the house and private schools and costly sports!  Keeping the house may never have been a realistic possibility, but at any rate they should have taken a hard look at the facts of their situation months ago and by failing to make hard choices sooner they have very probably narrowed their options now.

 

In my experience, delaying hard decisions rarely makes things any better.  Whatever resources they had the day he lost his job have been evaporating while they dither.

 

My wife and I are wondering whether to offer them some financial assistance, which we could afford, but we are reluctant to lend or give money if that may only enable them to postpone the invevitable a little longer!  Nor do we wish to deliver a "tough love" message along the lines of "we'll send you money after you have done X, Y, and Z."  We are of course praying for them, as that's one thing we can do that surely cannot make the situation worse!

 

TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
New Contributor
GRILLMASTERNEEDAHOUSE
Posts: 68
Registered: ‎05-26-2009
0

Re: Friends about to lose their house

In my humble opinion, when helping a friend sometimes means telling them something that is unpopular at the time. They will be upset, might even stop being friends with you but overtime, if you are good friends it will heal itself. I never been a believer in contributing to the problem nor allowing someone else bad decisions to reflect the mood in my house. My wife is good for that one. Everybody dump their problems in her lap and she is upset all day, then look at me half way crazy! LOL! But the bottom line, why would I give somebody money who can afford to send their child to private schools and expensive hockey/soccer clubs and my children don't? They need to make the first commitment of sacrifice before you sacrifice your family money. If not, you are contributing to the problem.
Grill Master now has a house! Closed 8/26. Yay!
Established Contributor
SonorityGenius
Posts: 729
Registered: ‎10-21-2007
0

Re: Friends about to lose their house

Do NOT send any financial assistance - no matter what sob stories they write you next!

I am sorry but people like that - who send kids to private schools despite falling behind mtg /card payments NEED to hit rock bottom before they can ever realize they're DUMB and DUMBER to continue living like they do now! Without jobs!

 

You need to email them stating the economic times are rough, they should be doing ALOT of cost cuttings (give examples of some cost cutting you did to make yourself look sympathetic and in recession too!) and offer your prayers NOTHING ELSE!

Frequent Contributor
Sommery
Posts: 265
Registered: ‎07-24-2009
0

Re: Friends about to lose their house

I'm sure their pride got in the way. They are trying to put a good face to the community. Rather than telling the school that they are going through money problems, they spent their savings. Most private schools are willing to help families who hit a rough patch with their tuition. They tend to have special funds just for that purpose. I just don't get it. My housing is the FIRST thing that ever gets paid. I was laid off for 3 months a couple years ago. My unemployment check was just enough to cover my rent, car insurance, and phone bill. I canceled my cable, kids activities, out to eat etc. It was rough, but we made it. And we didn't lose our home. And, now I'm buying a house. Guess what's getting paid first for the next 30 years?

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