Home ownership becomes American nightmare

Purchasing a home is part of the American dream, but for some, home ownership in the current economy has become a nightmare.

Yuma resident Lauri St. Cyr and her husband, Mike, were recently forced to foreclose after receiving a home loan that one credit counselor said they never should have qualified for.

The St. Cyrs were told they could afford the home — and the home payments that came with it. But after Laurie St. Cyr lost her job, the couple quickly fell behind on payments.

Their financial troubles started when the home increased $100,000 in price while they were on a waiting list for a new subdivision in 2005. St. Cyr said they were on the list for 15 months.

The St. Cyrs were not alone. Across the U.S., home prices increased with the boom in the residential market. In Yuma, housing prices jumped 42 percent in the third quarter of 2005, according to previous articles in the Yuma Sun.

While on the waiting list for the subdivision, St. Cyr said, she lost her job and asked their lender if the loan would still go through.

"And (the lender) said, 'Come in and we'll talk,' and she said 'You guys will be fine.'"

"I guess because we wanted the house so bad, too. I just thought OK, we'll make it work."

In January 2006, St. Cyr said, they paid $10,000 in closing costs and moved in. Their house payments were about $2,700.

Ten months later, St. Cyr was "robbing Peter to pay Paul."

So, she said, she contacted a Web site that specializes in finding lenders. Right away, she said, two contacted her.

"One said he could save me $400 right off the top. Well, $400 sounded great."

The couple met with the lender in Phoenix and paid closing costs again of $10,000.

"He split the mortgage up," she said. "And we took cash out."

St. Cyr said it covered their mortgage, paid off her husband's truck and they used a portion of the money to live off of until she found a job.

"We had great hopes," she said.

Soon, however, they were living off of credit cards.

And their payment ended up only about $100 less, she said.

"And it wasn't six months on this new (loan) and we put the house up for sale. And from May 2007 to September/August 2008, it was on the market straight and not one offer.

"We couldn't even get what we owed on the house."

Before they got behind in their payments, St. Cyr said, she tried to refinance their mortgage with Hope for Homeowners, a federal program through the U.S. Department of Housing and Urban Development. The program helps homeowners who are having a difficult time making payments.

St. Cyr said the credit counselor with the program sent multiple requests to their lender with no response. "She said we should have never ever gotten the loan — ever."

After their counselor said she never received a response, the St. Cyrs contacted a Realtor. That Realtor said they qualified for another program that could help, St. Cyr said.

So, the St. Cyrs went to Phoenix again. This time the lender asked for three checks. One for February, March and April of 2008, each for $1,800 to show that they could make the payment.

In November, their lender called and said they had only one record of someone contacting them on the St. Cyrs' behalf.

So, their lender said they could pay $1,900 for January, February and March of 2009, she said.

"That wasn't even the second mortgage," she said.

In April, St. Cyr said, the payments would go up to $3,500.

"I just called and told them to forget it. I was doing everything I could to stay here."

Now, St. Cyr said, they're working with local Realtor Carol Engler and lawyers are negotiating a short sale.

"I've had everything packed in boxes for three years. And it's in my garage, all my pictures off the wall."

She said she knows others are going through the same thing — just most people don't talk about it.

"I know some people say 'Well, why would you guys get something that you can't afford?'"

St. Cyr said it's because the bank told them they could.

The couple will rent a home now and stay close to family in Yuma and put their pictures on the walls.

"I don't care whether it's renting or not, I just want a home."

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A LOOK AT FORECLOSURE NUMBERS

The Mortgage Bankers Association's quarterly report on foreclosures in the United States, released in February, showed fewer homeowners are starting to fall behind on their loans, compared with the third quarter. But the number of borrowers who have missed at least three payments kept growing.

Here's a look at some of the numbers for the last three months of 2009:
Percent of homeowners in foreclosure or delinquency: 15
Percent in foreclosure: 4.6
Percent who have missed any payments: 10.4
Percent who have missed 30-59 days of payments: 3.6
Percent who have missed 60-89 days of payments: 1.7
Percent who have missed at least 90 days of payments: 5.1

Source: The Associated Press