It’s just business, Kyle & Kayle. We’re sorry. We never intended for this to happen. Your parents will take good care of you. Homelessness is like camping out. You’ll be okay. We want you to know, we are not in the business of stealing homes from children. It had to be this way.
Kim & Joe M. of Orlando, FL, fell victim to the shrinking house market. Both worked in financial services, Kim an administrative assistant at Wells Fargo and Joe a loan officer with a bank.
For five years, they stayed busy and saved money.
In July 20005, Kim lost her jobdownsized. Wells Fargo didn’t need her any longer. Not as many mortgage applications. Kim’s job search lasted three weeks before she found a replacement for 75% of what she had previously earned.
In September, Joe suffered an auto accident, putting him out of work for six months and without an income as the insurance companies battled it out.
Kayle, 6, and Kyle, 8, knew something was wrong. Mom and Dad were preoccupied. Money was tight.
Kim and Joe and their two children quickly fell victim to bad luck and a slumping housing market. They fell behind in their mortgage payments on the same house in which they had lived for eight years. No irresponsible overspending here. No new BMWs no Rolexes no expensive vacations no extravegence at all.
Joe got hurthe couldn’t work. Kim lost her jobshe couldn’t recover lost wages. Kyle and Kayle watched onhelpless.
According to the American Bankers Association, most people have less than 3 months worth of cash in reserve.
Despite eight years of perfect payment history, Kim and Joe’s mortgage company refuses to work with them. They’ve received a Notice of Default.
The foreclosure of your home can lead to the bank seizing your property, your cars, your stocks, your kids college savings! Even the IRS can get involved with wage garnishment or levying your bank account. Kyle and Kayle watch onhelpless.
The National Association of Mortgage Bankers (NAMB) records show that more mortgages go into foreclosure 3-5 years after issue than at any other time. Credit is trashed and families are scarred.
Children, the most innocent victims of unfortunate tragedy, watch onhelpless.
Kim & Joe’s horror will haunt them for life. More than 40% of borrowers took an adjustable mortgage in the past five years . Many of them have children.
Those teaser rates of 5% or less are set to explode their mortgage payments by 25-33% or higher when they adjust. In 2006, over 300 Billion dollars worth of mortgages will adjust with 1 trillion more in 2007, according to Freddie Mac, the secondary mortgage lender.
Homeowners are upside downthey have no equity. Some mortgage lenders, who shouldn’t be in the real estate business, appear to want to take homes from Kyle and Kayle.
They appear not to want to work out payment plans to help families victimized by bad luck and a slumping housing market.
Adding insult to tragic injury, Kyle & Kayle learned about deficiency judgment. The bank sold their homethe home where Kyle was bornthe sale didn’t cover the amount Kim & Joe owed.
The proceeds of the sale did not cover the total owed the bank, including legal fees, administrative fees, fee this, fee that.
If the bank cannot recoup their deficiency from you, Kyle & Kayle, and if your state will not allow a deficiency judgment, the lender will write the deficiency off on their taxes.
However, kids, the pain doesn’t stop there. Now the IRS may enter the picture. This deficiency amount not collected by the lender is considered money you owe.
They will add it to your annual income and expect you to pay taxes on the total amount. This is business, Kyle & Kayle. Nothing personal. You’ll get over it, Kids.
If your parents cannot pay, the IRS can come after everything you own, including your mom’s & dad’s paychecks.
Kim & Joe sought professional help as suggested. Kim & Joe’s lender chose not to help them save their home. Tragedy strikes not just once but repeatedly, oblivious to children.
It’s business. Real people with real children (scarred for life) lose their homes, get hit with a deficiency judgment & meet the Gestapo (the IRS).
It’s not just the irresponsible overspenders carelessly losing homes to foreclosure. Some are real people with real children.