LA, and most of the rest of the cities of the Southwest will be ghost towns in twenty years if the hydrologists are right and the water tables sink to nothing and the drought-ridden countryside ceases to provide water for reservoirs,” he wrote. “If the hippies are right and global warming is real, where do you think those displaced by rising sea levels and unlivable climates will go? It’s not rocket science to figure it out. They’ll go where there is water and land. If you’re thinking long term, now is the best time ever to buy in Detroit (or Flint).”
This was the kind of quasi-scientific underpinning that the Zeitgeist sessions never achieved, mainly because the conversations often veered wildly to other weighty topics: Was Magic Johnson better than Larry Bird? If we trained hard, could we dunk? Do we want to order another pitcher? John Law was showing me the way, making it all sound simple and logical.
Then I got an email in early 2009 from a San Francisco real-estate agent named Rich who had grown up in Flint. He had seen the blog and wanted to meet for drinks. It turned out that Rich was only a grade ahead of me, and we’d attended the same schools without ever managing to meet. He had clearly kept a low profile in the Catholic school system, somehow managing to make it through Saint Mary’s without ever getting paddled by Sister Ellen, which I didn’t think was possible. Sitting in another bar, this time the Latin American Club in the Mission, I told Rich about my crazy idea of buying a house in Flint.
“That’s not crazy,” he said, taking a sip of his beer and looking at me over the top of his small, wire-rimmed glasses. “I already own three houses in Flint.”
Rich is decidedly mild mannered, often speaking in such a soft voice that it’s difficult to hear him. So he hardly fits the stereotype of the aggressive real estate agent. But he definitely has the trait of people who sell things, especially things as wrapped in emotion as houses: he never says anything negative. He calmly rattled off all the good things happening in a city typically defined by bad news. Development in the urban core of Flint was taking off, he said. There was talk of a tapas restaurant. The new loft apartments downtown on Saginaw Street were rented out. Flint was on the cusp of becoming a full-fledged college town, and an increasing number of students would need places to live near the downtown campus of the University of Michigan–Flint. Prices were so low that there was nowhere to go but up.
I countered that I’d been away from Flint so long I wasn’t even sure what neighborhoods would be best for me. “No problem,” he said. “I can tell you anything you need to know. I’ll put you in touch with a few homeowners who know the neighborhoods. I can even let you stay in one of my houses when you go back to visit.”
He was already planning a trip to Flint for me. And given our shared background, he knew when to play the ultimate trump card—Catholic guilt. “You know Flint’s not going to save itself,” he said, raising his eyebrows. “A big corporation like GM isn’t going to rescue it. It’s going to take people like us to help turn it around. People who grew up there. People who remember what a great place it was. We owe something to Flint.” He paused, put his beer on the bar, and pointed at me. “You owe something to Flint.”
Unfortunately, I also owed something to Wells Fargo Bank, $551,000 to be exact. The relief that came with refinancing our mortgage in 2006 had quickly worn off, and the reality of our monthly payments was weighing heavily on us. Despite our scrimping, it was nearly impossible to save any money or make payments each month that covered even a tiny portion of the principal. If I allowed myself to think about it, I knew Traci and I could easily find ourselves ten years older with the same mortgage, no equity, no retirement savings, and payments well over $4,000 a month.
The situation got worse when Traci lost her job as an editor at the magazine where she worked in San Jose. We had talked about the possibility of this happening—the publication was of dubious quality thanks to the aging frat boys who ran the place—but it was still a shock. She threw herself into freelancing but wasn’t making close to her old salary, and the feast or famine nature of being an independent writer made budgeting impossible. I called a mortgage broker about the possibility of another refinancing, but we didn’t have enough equity or cash to meet the down payment requirements. Just when I had come to fully embrace the joys of home ownership, there was a looming possibility that we might lose our house.
I became obsessed with reading anything I could find about real estate, somehow thinking that being more informed would improve our financial situation. That’s how I discovered a way out, a logical proposition that would rescue us from the ongoing worry and stress of owning a home we couldn’t afford. Two words: loan modification. Traci and I would simply ask Wells Fargo, our loan servicer, to change the terms of our mortgage to make it less burdensome for us. We envisioned a reduction in the principal and a lower interest rate. It seemed like a reasonable request given the utter collapse of the housing market. How could the bankers refuse? We were doing them a favor by helping them avoid another foreclosure.
Based on home sales in our neighborhood and casual conversations with real-estate agents, I knew we were not underwater on our mortgage. We’d lost a lot of value from the stratospheric prices at the height of the bubble, but the house was still worth more than we’d paid for it. After the house-hunting process and the refinancing odyssey, I felt prepared for the long, frustrating modification journey that articles and web forums warned me about. I also knew our chances of success were slim. The mortgage industry was in disarray. It was often difficult to determine who held a mortgage, especially if it had been sliced and diced into the toxic securities the media was trying to explain to the public. But, aside from the lottery, we didn’t have a lot of other options.
It appeared the best chance for a modification was being in a little trouble but not a lot. If you were too broke, the lender wouldn’t bother because you’d probably default on the modification anyway. And if your financial situation was too rosy, you could probably make your current payment. You needed to find the sweet spot between skid row and easy street. But even if you did, there were endless tales online of homeowners who were refused a modification for no apparent reason. It was all a leap into the unknown.
With this nebulous background information, we composed a letter explaining our situation to Wells Fargo. We were not in danger of missing a payment, we wrote; we were thinking ahead to the day when our interest-only payments would balloon into principal plus interest. We were being responsible by recognizing trouble down the line and trying to correct it early. At the same time, we explained that Traci had lost her job and my freelance income was dwindling as a result of the bad economy and the death of journalism as we knew it. An unexpected financial setback—a leaky roof or a major car repair—might cause a missed payment.
“Kafkaesque” is a pretentious and overused term, but I feel justified in relying on it to describe the loan modification process with Wells Fargo. The bank’s symbol is a stagecoach, and I wondered if the corporate monolith relied on a team of horses to slowly transport our financial documents between far-flung outposts. I imagined our modification application and income tax forms bouncing off the top of the stagecoach on a bumpy road in Utah. Why else would they request them three times? And each request came with an urgent warning that we needed to fulfill it within twenty-four hours. Frantically faxing 170 pages of documents before work—a two-hour ordeal complete with multiple misfeeds, numerous disconnections, and several paper cuts—was enough to make me question the point of home ownership, if not life itself.
I spoke to a bevy of polite but clueless representatives in Des Moines, Saint Paul, and Milwaukee. I chatted with Larry, Kary, Tanisha, Danielle, Nathan, and others. I got conflicting information from each of them. It really wasn’t their fault. One representative confided to me that he had been thrown into the job with little training. He was just happy to have work in the crumbling economy. I took notes on all the conversations, filling a fat notebook that I kept next to the phone for easy access. Some days, just for fun, I’d hang up with one representative, then immediately call back just
