Unlike Echidne, I'm not an economist. I have no great insight into what Paul Krugman called the mortgage mess in a column yesterday. But I hope you won't mind me telling my own story.
My sister owes at least $5,000 on a small home assessed at $90,000, a little less than what she paid for it five years ago. She has about $30,000 in equity. A few days before Bank of America declared a moratorium on foreclosures, it sent her a letter, threatening to foreclose on Election Day if she didn't pay her debt and double her house payments for the next six months. We're in limbo. I have done some research but haven't had the energy to do more.
Working with BoA has been a nightmare. I have power of attorney, and every time I called, I got someone different in a call center, often with different answers. For instance, one told me to total up my sister's medical debt. When I called back, another person told me that she had too much debt for BoA to work with her.
I wrote about this on 1/29/10, and some readers scolded me for not being more understanding of debt collectors. At least they have jobs. My sister got fired for petty reasons in May, and I can't help but think it had to do with her age and declining health. She worked in a hospital and had insurance, by the way.
Earlier, I reached a local BoA manager who told me that the staff was working on a solution, I didn't need to keep calling, and I should stop worrying about foreclosure. They would notify me before the case got that far, she said. They didn't, of course.
Right now, my sister's planning to move into an old trailer in the country with her son and his family. Her other son lives with her and works in a factory. On his wages, it will be hard to afford rent. I better remind them to vote while they still have a permanent address.