Wednesday, May 23, 2012

What would you tell your kid if you were being foreclosed on?

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I may have mentioned once or twice that we bought a house.  A house a realtor would say "needs some TLC," which is really code for "will require more hours of back-breaking labor than you can possibly imagine."  I seriously spent seven hours on my hands a knees this Sunday scraping paint splatters and peanut butter and ketchup and gum and jelly and heaven-knows-what-else off the floors.  And that was just to clean BEFORE we could start renovations.  The only thing worse than cleaning up your own messes is cleaning up someone else's!

Photo by Niall Kennedy via Flikr
It's not a surprise, though.  Since Nevada's topped most foreclosure ranking lists for the past couple years, there are an awful lot of houses like ours out there.  In fact, this house and all the work it needs remind me an awful lot of our first house, which was also a bank-owned foreclosure when we bought it.

Foreclosures have become so common that they have just started to feel like a fact of life. Until this weekend.

I was outside washing out a bucket, and the little second-grade girl who lives next door came over to introduce herself.  She used to be best friends with the little girl who lived in our house.  They used to have sleepovers, hang out in the hot tub, feed the fish in the fish pond.  And she told me, "Yeah, the bank took my friend's house away and made her move to a different town."

All the sudden, I had a window into the very real heartache that people - mothers, fathers, spouses, children - go through on the other side of the foreclosure process.  Of course, I have no way of knowing exactly what  the former owners of our house told their children about what was happening, but filtered down through the mouths of eight-year-olds, the reality had a very clear villain: the big bad bank.

Now, I'm sure as heck not excusing the banks or the role they played in this financial mess our country found ourselves in; I'm more than familiar with the shady lending practices and sometimes outright lies.  But they weren't the only ones to blame, either.  Realtors and investors convinced people (and often themselves) that there was nowhere to go but up forever. People borrowed more money than they should and signed up for loans they didn't understand.   And the reality when you borrow money is that if you don't pay it back, you don't own what you bought.

I pray that I'm never in a position where I have to explain to my child why our home is being foreclosed on, but it's something thousands of families in my community have undoubtedly done. And it got me thinking, what would I say to my son?  I hope I'd tell the truth: That mom and dad can't afford to make the payments on the house, so we can't live there any more. Or maybe I'd be a big enough person to use it as a teachable moment about borrowing money and using credit.  But maybe I wouldn't be.  Maybe I'd be angry or depressed or embarrassed, and I'd find someone to blame.  Maybe I'd paint my own picture of the villain.

One thing is clear, though.  At least here in Nevada, I think there will be a whole generation of kids whose lives have been changed by the big bad banks, whether through personal experience or something they heard from a friend.  I wonder what that will mean to them when they're adults.

What do you think?  How would you explain to a child what foreclosure is?


  1. As hard as it is sometimes... I believe in telling the truth.

    Of course that means you have to be truthful to yourself as well.

    I thank God that my husband, and neither of my two children (actually no one I know personally) have had to go through a foreclosure. My heart breaks for those that try so hard.

  2. Foreclosures sound horrible to me, it really does, especially when like Toqua says, the people going through it try their hardest to avoid it. I would just be truthful to the child but I wouldn't make it sound like such a big deal, it is something that they'll be likely to not forget even when they're older so that's worth considering.

  3. I would tell them the truth. And the truth is, the banks did what they always do. They sell products. If people aren't smart enough to learn what they are signing BEFORE they sign it then that's their fault. There are a lot of people who lost their jobs and can't pay the mortgage, and that's fine, sometimes that stuff happens in life. But THAT's their truth... not that "the bank" took their house.

    I think the biggest tragedy from the whole housing crisis is that the people that needed to learn from it, haven't. And they will continue to point the fingers and place the blame everywhere but with them selves for not being responsible with their money decisions.

    Just so we're clear here... I know this is not ALL people in this situation, just the ones in the media.

    1. I know my above comment sound heartless. But it's just so frustrating to see people (like my own cousin) who bought a home knowing the cost was twice what it was worth, rolled thousands of credit card debt and car loans into her mortgage, now owing four times what her house was worth on a good day, only to stop paying a year later because she couldn't afford it. And,then when the bail out came for her, she re-mortgaged again, rolling more debit and loans onto a 50 year note and yet again stopped paying. Her latest acquisition instead of paying her mortgage payment? A brand new truck at 27K.

      I love her, but this is what many in this country have done. There are plenty who have lost their homes due to illness or the like, but they OWN that... they don't blame the bank. They just do the best with what they have and move forward, in some cases foreclosing on the house. The country's issue is more people like my cousin, because she is not alone in her choices and the government has given her the big bad bank to point the finger at.

    2. Replied below, but forgot to hit reply! Sorry about that!

  4. Amen to that, Juli. And I don't think it sounds heartless at all. I'm right there with you. I think exactly what you said is true: People who should have learned haven't. I know it's difficult and heartbreaking situation for them, but it won't stop them from doing it all over again (while pointing the finger at someone else).

    In the house we just husband and I borrowed HALF of what were approved for. Because it was what we felt comfortable and responsible doing.

    Sometimes I look around and get so frustrated, though. I see all these irresponsible people who borrowed money and took vacations or bought boats and cars and toys. They live a lavish life they can't afford while I pinch pennies and deny myself luxuries sometimes because I believe it's the right thing to do. I believe it will be it's own reward in the long-run, though. Or at least I hope so! I said above, I hope I'd be a big enough person to tell the truth to my kids if we ever find ourselves in that situation. To accept my own responsibility. While I can't know for certain, I think I would.

    1. I bought my house at the same time as my cousin. I worked part time (full time hours), had just gotten divorced, had two babies under two, and my ex-husband never paid child support. I had $7 when he left. Was I thankful that the banks took a chance on me? yes. Did I borrow even close to what they wanted to give me, HELL NO. I knew I needed to put a roof over their heads permanently, not just because the bank said I could.

      I won't lie, things were tight at points, at one point my son (I think he was 4) asked why we never "had the money" for stuff when I worked all the time. I told him the truth, that it was just me supporting them and that their dad wasn't doing his part in financially supporting them. Is it a hard lesson? yes. But I'll tell you, at 10 and 11 they are more responsible with their money than most 45 year olds I know. Kids are smart, they learn from our example. If we teach truth with money, it will only benefit them in the end.

  5. I don't know that I would tell the a lot of people. I guess it depends on the situation though. If it were for medical bankruptcy or something out of my control I would probably tell the truth. If it was because I knowingly got in way over my head and now I'm having to pay dearly for it, I would probably be too embarrassed.

  6. This is a really sad and thought provoking post. I feel like no one should feel embarrassed to tell their kids or anyone else that they are struggling. In this economy people have lost jobs, gotten wages cut and struggled to find work. As long as you are doing the best you can to support your family, you should never be ashamed of the circumstances you might get into, we all have to face those things at some point in time.