The Psychology of Foreclosure: Despair and Litterboxes

29Sep09

I just finished reading Dewey, The Small-Town Library Cat Who Touched the World. What a great book, great story, great cat.  In the 1980s, right around the time Dewey showed up in the overnight book drop, Iowa farmers were experiencing what Florida homeowners are experiencing right now. The only difference is that, in addition to losing their homes, Iowans were losing their livelihoods to foreclosure.  Land values were booming, tempting farmers to pull equity out of their land, and use it to buy more land, all based on the assumption that real estate values would rise ad infinitum. And then CRASH went the pyramid, POP burst the bubble.  Those were dark days in Iowa, just as these are dark days in Florida.

The author said a couple of things that really hit me, including, “…one of the worst things about bad times is the effect on your mind. Bad times drain you of energy. They occupy your thoughts. They taint everything in your life. Bad news is as poisonous as bad bread.” They say fear has a smell? Well, despair has a smell, too. This is what hits me on my first visit with homeowners who can’t make their mortgage payments.  It’s as though they’re in prison, the governor just turned down their request for a stay of execution, and they’re waiting for the footsteps of the executioner. 

 The other quote that resonated with me is: “…everyone has a pain thermometer that goes from zero to ten. No one will make a change until they reach ten. Nine won’t do it. At nine, you are still afraid. Only ten will move you, and when you’re there, you’ll know. No one can make that decision for you.”  The thing is, no matter how bad the situation is, no matter how obvious that the best option for avoiding foreclosure is a short sale, most homeowners I meet for the first time to discuss their options still cling to the magical idea that the government or the bank will come to their rescue.  I think that’s because they’re not at a 10 yet.  In the beginning, these folks (1 of 54 households in Florida) are like hurricane survivors; they’re so overwhelmed that they cannot form a strategy.

 I feel like the Dewey of Foreclosure Prevention.  For some, I’m a distraction, for others an anchor. To the banks, I’m just another animal making a mess in their litter box.

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Tags: Forclosure, Foreclosure, Foreclosure Prevention, Foreclosure Rescue, foreclosure vs short sale, loan modification, Loss mitigation, mortgage, mortgage crisis, Mortgage Debt Relief, negotiation, save our home, Short sale