Glimmers of Hope

Right now our 1st and 2nd mortgage payments total = $5700 / month

Based on the recommended ratio that a house payment should be no more than 30% of total net income per month we should have a net income of $19,000.00 per month. 30% of $19,000 = $5700 a month.

So even if we erased all of our credit card and personal loan debts our house payment would be 60% of our net monthly income - at best. That's assuming I get the maximum monthly bonus plus maximum monthly expenses reimbursed each month. That would still be 60% of our net income going to interest-only loans - not even paying down the mortgage. So I'm already a renter - it's just that my landlord is some mortgage backed security financed by my last refi back in summer 2006. And since we don't have a subprime loan and our loans are greater than $720,000 then we dont fall into any category for help - government or mortgage lender.

And with (my wife's) job at risk this year because of the state budget cuts and the value of houses being what they are it just doesn't make sense for us to stay in our house any longer and continue to fall behind each month. If we short sale our house we would be selling it at a $250,000 loss. And everything I read indicates at least two more years of decline in home values - most likely down to $100 a square foot. Might even get down to $75 or $90 a square foot. And where we live there is just not enough high paying jobs to support the market value of the houses around us even at today's prices.

And paying off our credit cards would not change the fact that we have 60% of our income going toward mortgage payments. And if we declare bankruptcy (Chap 13) and wipe out our debt that way then we'd still owe the $5700 a month house payment - we'd still have the 60% of our net income going to a mortgage.

We need a house or rental payment from $2600 to $3000 a month tops - based on my readings.

I'm sorry this realization is coming so late in the game. At least we've managed to stay out of bankruptcy so that helped us a lot. My employment applications with Fortune 500 companies ask if I've ever declared bankruptcy so it is important for me to avoid that which could prevent future employment opportunities. So that helped a lot and was not a financial waste. We just have to get out of this house.

It's been three years since my wife and my kids have been on a vacation of any kind. I still struggle each month. My January bonus and tax refund have already been dissappearing because of expenses that I just can't keep up with even though we have made lots of cuts in our budget. We just can't live like this anymore.

(My wife) goes to work each day and almost every day her co-workers will talk about their vacations they are taking or have taken recently and they'll talk about the stupid people who took out too much mortgage and look what mess they're in and she just has to try and hide her pain at being one of those people that they talk about.

As for me, my co-workers are not as bad but they too talk about their vacations and more of them talk about their pensions and how close they are to retirement. Some have already retired and are collecting their pension and working for another company at the same time. I just nod my head during the discussions and try to get away or turn the discussion back to work. Psychologically, (my wife) and I need to get out of this house and after that maybe get away for a couple days on a mini-vacation just to feel like normal people again.

One of the passages we study in the Bible - Romans 5:3-4 - reads something like "...suffering creates perseverance; perseverance, character; and character creates hope." Well, we got the suffering down and now we're learning perseverance and maybe character is being built because there are the tiniest glimmers of hope.

2008 not starting out so good

Both my wife and I have been very sick these last two weeks. She had to go to Urgent Care two times in the last three weeks. My son broke his leg two weeks ago at work and then last night my daughter was hit by a hit-and-run driver. I am having to deal with insurance companies, my son's employer, my car insurance company, medical providers, car rentals, police reports and now I'm making up flyers to post near the accident scene to see if I can flush out the guilty parties. I'm feeling a bit overwhelmed at the moment.

The hit-and-run will cost me about $1000.00 after I pay the collision deductible and a car rental.

On the upside, I am joining a Crown Financial group at my church. We'll meet for ten weeks and go over how to get our financial house in order. I'm sure it's information I can read on my own but although I really have no savings or 401Ks I thought I should go back to thinking and planning as if I did have discretionary income. I've forgotten to live below my means and maybe this course will force me to make the hard choices such as walking away from a house whose market value is at least 25% to 30% below what I owe. My mortgage payment would probably allow me to pay rent on three houses instead of trying to scrape by month after month for the last two years. It's an awful way to live - borrowing here, borrowing there. I am one paycheck away from living on the street. The worst part is I'm supposed to be supporting a family of four and trying to help my kids attend college.

At least my son has learned that debt is a bad thing. We talked earlier today about him taking out a student loan to finance his education and he was adamant that he would not go into debt. I'm proud of him that he wants to avoid debt. Maybe that is the silver lining I am looking for here: that at least one of my kids already knows the weight of debt and how it can drag you down. My hope is that he and my daughter will avoid my mistakes. I guess every parent hopes that.

Paid off another delinquency!

Starting 2008 better - I paid off another delinquency! That "cures" about $900.

My Prosper loan funded!!!

I am soooo excited this morning!!! My Prosper.com loan funded! Now I can payoff and get rid of those plundering PayDay loans that have been keeping me down.

Prosper Lenders, Thank-You soooo much for this loan! I am so very grateful and feel blessed.
I will make you my first priority to pay you back early in 2008!

And to the lender on the mountain - thank-you.

How did I get here? - 9/11 was the beginning

If I'm going to tell my story then I might as well explain that my financial problems started several years ago. Right after 9/11 I was laid off work for six months. I worked for a major computer company at the time and they were in the process of selling our software division to a foreign company (in Israel). Well three weeks after 9/11 happened the buyer company decided that they didn't want to bother with the sales related personnel. They only wanted the developers and a small staff of managers - so the rest of us were let go. I tried any and all companies during that time but I just could not get a job. Six months later I finally took a position with a very small company that paid me half of what I had earned the previous year. And I was driving to and from work 180 miles round trip each day. But I had a wife and two kids to take care of so I did what I had to for employment. I also went through almost all of my life savings.

With 40% of my annual salary gone and my decreasing savings and my not getting home at night until very late I finally had to sell my house and move my family. I barely had enough to get us into another house. Right after we moved into our second house I was laid off again.

I ended up at another small company. This time a startup. I worked for that startup (founders and owners from India) for almost two years. But they screwed me when they got bought by a much larger company: I had vested nearly 70000 shares of common stock which I purchased. I then left the company but kept my shares. The board of directors voted that Common shareholders - such as myself and several others - would get nothing, ZERO, from the buyout. They voted to pay ONLY the Preferred shareholders. I lost everything.

(So I've been burned by a computer hardware company owned by founders from India and I've been burned by a computer software company based in Israel - this is what happens when Americans work for foreigners. Not to mention all the American lives lost on 9/11 due to foreign terrorists!)

And it's been a struggle ever since. My life was going great up until 9/11. But it's been downhill since then.

Paid off one delinquent - now current

Some good news. I was on a repayment plan for the last three months with one of my creditors. I called them today and found out that my last payment made yesterday brought my account up to current status.

While on the phone I asked the customer service rep to please notify the credit bureau agencies as soon as possible and ask them to remove the delinquent status from my report. She said that she would send an internal email within the company to make that request. I'll follow up next week to make sure that request was made. The sooner that and the other two remaining delinquents are removed the better it will make my credit score.

I monitor my and my wife's credit score monthly through Experian. It makes me feel good to see that my wife's score has begun to improve over the last 3-4 months. My FICO score has stabilized and will begin to improve soon.

My Prosper.com loan request - offering 35% ROI

(Here's an email I sent out to some friends and relatives. It hurts to ask people for money. Beg, Borrow, or Steal - the only thing I haven't done is steal for money and I won't do that.)

Hi,

I've applied for a loan on Prosper.com and if you're interested in a 35% return on your money then you might want to checkout my link below.

You can bid as low as $50 on my listing. If you sign up as a lender and bid on my loan, you'll earn a $25 sign-up bonus.

http://www.prosper.com/lend/listing.aspx?listingID=249436


Thanks,