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The Jonses Lost Their House Today

August 3rd, 2007 at 09:07 pm

Today at foreclosure auction my neighbors "The Jonses" (not their real names of course) lost their house.

I've been following what has been happening with this house for the past 6 months, and dug in to the records available on-line, because I am interested in buying it. [Even tho' DH and I are planning to relocate to Texas in 2 months, we have been keeping an eye on the local real estate market and are would gladly stay here if we found a screaming deal on a house.]

The real estate market in my area has definitely cooled off, but it is not the disaster that it is in some other parts of the country, so foreclosures in the neighborhood are not an everyday occurence.

If this were a case of "poor, naive borrowers ripped off by an unscrupulous mortgage company" I would not tell this story. But this is a clear example of people not just trying to keep up with the Jonses but trying to BE the Jonses, and it is my hope that by sharing it anyone who is living beyond their means or living paycheck to paycheck will stop and think about their lifestyle and the consequences.

There can be no doubt that Mr. Jones is an extremely intelligent, healthy, sane man. He would not be able to have the job he had if he were not. He also made a top-drawer salary. [No, I do not know exactly what his take-home pay was, but it is public knowledge what people in his profession make and his salary was top-tier.] Mrs. Jones is a lovely woman who is always impeccably coiffed and dressed fashionably but tastefully.

The Jonses drive late-model European luxury cars that are always spic and span.

Their home is their pride and joy, and they wanted nothing but the finest in upgrades. Even tho' the house was brand new and perfectly fine by most people's standards, when they bought it 3-1/2 years ago, they had many features (sinks, light fixtures, cabinets, flooring) ripped out and replaced with top-of-the-line items before they moved in. Their kitchen appliances are the type Martha Stewart might have in her home. They turned one bedroom in to a well-equipped home gym, and they have a TV that takes up an entire wall in one room.

Mr. Jonses' yard is the envy of his neighboors. He maintains it perfectly, thanks in part to his ~$3K mower that makes it look like a golf course. [Yes, at least one neighbor went out and bought the same machine, perhaps out of envy over his neighbor's grass? And yes, even I asked about it and went on-line to see how much it cost thinking my DH might like one ... And NO, after seeing the price, I most definitely did not buy one.]


The Jonses were the envy of the neighborhood, the ones some others tried to keep up with, and the subject of much admiring (and probably slightly jealous) talk.

But talk about a huge difference between appearances and reality! What I learned from digging in to publicly-available records is that the Jonses not only refinanced their home about 4 times over the course of 3 years, they currently have a whopping THREE Deeds of Trust on the house. There are not only the 1st and 2nd mortgages, it looks like maybe there was a piggyback loan to cover the original downpayment. And each time they refinanced they increased the principal balance. This means they used their home as the proverbial "piggy bank" which no doubt is how they paid for the luxury cars, appliances, tools, fixtures, and who knows what else.

About a year ago, Mr. Jones and his employer parted ways. Circumstances are unknown. According to Mr. Jones, it was his choice because he plans to start his own company. Whether this is true or not is not certain, but the new company is not yet launched so I have my doubts.

A few months after that, foreclosure proceedings were begun. The Jonses listed their house on the market and tried to sell it, but they did not have any luck. I know they had at least one offer. It was a lowball offer from my DH and I, that we made when we thought there was only 1 mortgage on the house. Now we know why they didn't even bother to counter. They weren't able to be very flexible in their pricing because they owe about 98% of their asking price on the 3 Deeds of Trust. That does not include the delinquent property taxes, nor what they would have to pay in sales taxes and real estate commissions. [Naturally, they went with a full-commission agent, even tho there are discount agents available in our area. Nothing but the best, right?]

The foreclosure auction was continued (postponed) once, but the 2nd scheduled auction date was today and the house was auctioned off. Of course, no one wanted to bid on a house with so much outstanding debt, so the house was "reverted to the beneficiary" which means that the bank now owns it.

The Jonses are really, really nice people. While I definitely hold them responsible for what has happened to them, I wish them well and hope they can pull themselves out of the quagmire they are in. I hope they will move out of their house and leave with dignity. It would be a real shame for the neighbors to see them being forced out by Sherriffs deputies.

There are SO MANY lessons to be learned from this story and I'm sure you can figure them out for yourselves ...

7 Responses to “The Jonses Lost Their House Today”

  1. disneysteve Says:

    It is hard to muster up any sympathy for folks like that.

  2. Ima saver Says:

    Thanks for telling that story. I feel so good knowing that my house is mortgage free and I could never lose it.

  3. katwoman Says:

    I think the real tragedy is that it was all avoidable.

    Scarry stuff to be sure!

  4. baselle Says:

    I'm with disneysteve on this one. And I would go further that with shenanigans like this, kool-aid drinkers like this keep the RE market in Seattle artificially high.

  5. LuckyRobin Says:

    This story is being repeated all over my county. People looked down on us because we did not buy the house we could "afford." Afford to them meant what we could get a loan for. We bought a house we could truly afford instead. Now we are sitting pretty in a home that has doubled in value while they are crying all the way to the bank, with their interest only loans, and ARMs, and they are moving into foreclosures and personal bankruptcies.

    If we had bought a house with what the bank would have been willing to loan us, we never would have made it through three years of medical problems without declaring bankruptcy. The same people that looked down on us before now think we were pretty smart.

  6. scfr Says:

    I can only imagine what the Jonses thought of us with our older model "sensible sedans," my husband mowing the lawn with his Craftsman hand-powered reel mower, and my clean but garage sale clothes. I wonder if Mr. Jones spit his coffee out when he saw our purchase offer was for cash?

  7. Broken Arrow Says:

    Yeah, I'm sure this is going to be an all-too-familiar story as of late. Thanks for putting sharing the story. Smile

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