Home Sweet Home...

In an effort to help friends and family understand what has happened, and prevent the need to tell the story over and over, it was suggested that I keep everyone updated on our progress through a family blog. Luann and I are grateful for your thoughts and prayers as we go through this difficult and growing time.

In 2006 a business associate was approached, and subsequently approached me, with an idea and a program that we were told would help us and our families. After several talks, we both decided to follow the program. As a result, we bought each other’s house. The reasoning he used was as follows:

If someone has good credit and doesn’t own a home, it would be easier for them to purchase rental properties. If you’re not personally obligated to a mortgage, you can qualify for more loans. In adition, if you own rental property, you can claim 75% of the rents you receive, as income. That in turn would allow you to qualify for even more rental property. As long as you had a signed lease, and the rental income was equal to or greater than the mortgage payment, your portfolio would continue to grow without the risk of losing any money. The lease would protect both you and the person leasing the property if anything ever happened. The lease we were told to use is called a Capital Lease, and runs for 30 years. At the end of 30 years the leaser could buy out the lease for $1.00. In the mean time, the capital lease gave the leaser authority to do whatever they wanted with the house up to and including selling it.

My first mistake was not following my feelings. Instead, I let them talk me into it. The sales were final in March of 2006. We didn't see any tax advantages like we were told to expect, and neither one of us felt comfortable not owning our homes, so subsequently we decided to buy them back.

We met all the qualifications and did all the paperwork required, and scheduled the closings for the end of July, 2007. Luann and I had won a trip to Rome, so we scheduled our closing for the first week in August, after we got back. My business associate closed his loan and bought his home back while we were in Rome.

The morning we were to close our loan we got a call from the title company telling us the mortgage company wanted to postpone our closing for a while. They wanted to check some things, so we agreed to postpone it for a couple of days. This went on for the rest of the week. We would schedule the closing, they would agree, and then they would put it off again. Nobody could tell us what the problem was, they just said they needed a little more time. Finally, we were told the mortgage company was suspending all transactions across the country. We didn't know it at the time, but it turned out to be the beginning of the mortgage crisis.

At first we were told they (the mortgage company) wouldn’t make any loans to a self-employed person. We tried several companies and got the same answer. Then things got worse. At first it was only self-employed people that couldn't get a loan. Later it turned out that nobody could get a loan. It didn’t matter the circumstances, the whole industry just shut down. This was about a year before the value of homes dropped and the stock market crashed.

At the time (2007)I was working for Allstate. They had a major change in management and philosophy, and as a result, I resigned from Allstate in January of 2008. I left on great terms with Allstate, but it's not so good now. I could write a novel about my experiences with Allstate, but that’s another story.

When I left Allstate, I had a no-compete clause in my contract. I knew about it, and was prepared to wait the required one year before contacting any of my clients. We had enough in savings, and I had enough other business to keep us afloat. We had some problems with two other homes we owned, but as far as our personal life was concerned, we were okay. However, Allstate has refused to allow me to service my clients, even after waiting the required year. Going without the main source of income for over two years has really drained the reserves we had.

My business associate had purchased several pieces of property and was going through some problems I wasn’t aware of. I certainly don’t blame him for my decisions; I made them myself. Looking back, we could have done things differently, but hind sight is 20/20. Neither one of us would have done some of the things we did. They weren’t dishonest, they were just ill-timed. We didn’t know what was coming.

Taylor Bean & Whitaker was the company that held the mortgage. Our interest rate was 8.75% and interest rates in 2009 were 4%. The difference in our monthly payments would be about $1,500. We contacted TB&W about doing a loan modification, and were told the only way they would consider doing it is if we were behind on our payments. They assured us that with the bailout money and the stimulus package the government offered, there would be no problem.

We completed the paperwork and submitted everything to TB&W in late April or early May of 2009. Then, we waited and waited. I finally got through to a lady named Cynthia. I spoke to her several times in August, the last time on August 17^th and made sure she had everything required. She said she did, and gave us a preliminary approval at that time. She said the paperwork needed to be forwarded for the proper signatures and would take about a week.

When I hadn’t heard anything by the end of the second week, I called her back. When I finally got her on the phone, she asked me if I had heard the news. When I asked her “what news?” she told me to go to Taylor Bean & Whitaker’s website. I did, and discovered that the week before; the federal government had shut them down. I still don’t know what they did, but it stopped the approval we needed. Confusion reigned, and nobody knew which bank our mortgage had been assigned to. All we could do was wait.

Finally in November my business associate received word that the mortgage was being handled by a company called American Home Mortgage Servicing Inc. I contacted them and was told that I couldn’t talk with them; the mortgage wasn’t in my name. We sent in the required paperwork, and I finally got approval to at least talk with them the begining of December. I explained what had happened, and they told me to submit a new application using their paperwork. I did, and the process began again.

Then, on February 24^th we received a foreclosure notice. It said that our home would be sold at auction to the highest bidder on March 24^th. I had been told that if there was a loan modification in progress, they wouldn't foreclose on a home. I called AHMSI to find out what was going on, and was passed from department to department, with everybody claiming I needed to talk to someone else. In the mean time, the clock kept ticking.

I did find out that AHMSI is a servicing company that handles the accounts for several banks. These include Wells Fargo, Bank of America, Chase and others. As far as I can tell, AHMSI doesn’t own the mortgage, but they won’t tell me who does. At one point I thought Wells Fargo had bought the mortgage. I submitted another packet to them and was waiting for their approval. I was told that everything was in, and there wouldn’t be any problems. The name of the man who works for Wells Fargo is George. The week before the foreclosure, George was admitted to the hospital with kidney stones. While he was in the hospital he had a heart attack. (Is this sounding like Peyton Place, or what?) I don’t know how he is doing, but his second in command couldn’t handle everything, and let ours slip by. As a result, our home went to auction.

At the auction AHMSI made the opening bid of $352,750. Nobody else bid on it, so it went back to the bank.

A man named Brad came to our home April 2^nd and told us he was representing AHMSI, and that we had until the end of April to leave. I gave him a copy of our lease and he said he would submit it to the bank. I asked him which bank it was, and he said he didn’t know. He mentioned the banks I listed above and told me I would be hearing from them shortly.

I talked to him again April 5^th. He told me the banks attorneys had decided the lease wasn’t valid, and we had to leave. I told him I didn't agree with that decision, and asked him again who the bank was. He told me he didn’t know; everything was going through AHMSI.

On April 7^th a man came to the door and served us with a notice saying we had 90 days to leave. We will continue to fight, but as of now we don’t see much hope.

Here is where we stand currently:

Someone could buy the home and let us rent it back, until things change, and we can get a mortgage in our own name. We can’t qualify currently because I’m still self-employed. They won’t even look at our application. As much as we would love to have that happen, we’re not holding our breath.

It appears that we will be forced to move. We don’t know where or when, but we would like to stay, at least until Jason can finish the school year.

Our immediate family has been very supportive. We are so blessed to have the wonderful family we do. Their love and understanding has gotten us through so far. We love them and are so grateful for them.

I’ve spoken to our Bishopric and received a wonderful blessing. I can’t express how much I love them and our Young Single Adult ward. The opportunity to work with these members has been the biggest blessing I’ve had, next to my wife and family. It breaks my heart to think of leaving them.

We love our Kenwood 1^st ward and our Wilford Stake members. We love our neighbors and friends. We couldn’t find a better place to live, or better people to live among. We’ve been here for 20 years and love them all. The best prompting we ever followed was to move to Salt Lake City, and to this Stake. We love our Garden Heights ward, our Kenwood ward, and our Stake. They have loved and supported us and our family in ways that we can’t even express. It will be very hard to leave. I still hope we can work things out.

If not, there must be a reason. As hard as it would be to leave, we must be needed somewhere else. Somehow, we’ve (I’ve) got to have enough faith to put ourselves in the Lord’s hands. It’s the hardest thing we’ve ever done, but past experiences have re-assured us that He lives, and He knows us personally. He knows what’s best for us and wants us to be happy. We can’t know what joy is unless we know sadness. If we don’t have opposition and resistance, we can’t grow. I just wish I knew how much we still needed to grow.

I don’t fault anyone. Circumstances and things happened that we didn’t expect or predict. It feels like the perfect storm has descended on our home. Would I have done it differently? Knowing what I know now, of course I would. But if the situation was the same, and I had the same decisions to make, I’m not sure I would have made them any differently. That’s not to say I shouldn’t have, but its water under the bridge.

We will keep you updated on what happens. For now, we’re looking for a place to move to. If anyone has any ideas or suggestions, we’re open to them. Thank you for your love and support. Thank you for accepting us. Thank you for being our friends. Thank you for understanding. We could never say thank you enough. We love you . . .

Ken